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Lightspeed POS - Point Of Sale Software Company On The Move

01/07/21 05:07:11 PM
by Matt Blackman

Tech stocks were in big demand as 2020 came to a close. So what's next?

Security:   LSPD, LSPD.TO
Position:   N/A

Lightspeed POS, Inc. is headquartered in Montreal, Quebec, and was founded in 2005. It provides retailers and restaurants with point-of-sale and business service software according to the Wall Street Journal.

Figure 1. Daily chart of Lightspeed POS showing recent bull flags and breakout points (green arrows). The linear regression line (red) showed "fair value" at $40 at the end of December 2020.
Graphic provided by: Freestockcharts.com.
 
Fundamentally, the company continues to lose money but has seen revenues grow 400% since 2016. It reported a loss of $44.77 million in its latest quarter (Q1 2020) on gross revenue of $160.54 million (CAD). But it also reported year-over-year sales growth of 58%.

Judging from its website, the company has been on an acquisition tear since 2019 adding four companies and 1700 employees to its roster in the last two years. The current low interest-rate environment has clearly benefited the company.

Figure 2. The weekly chart of LSPD together with its industry, Application Software (purple), from when it launched on the NYSE.
Graphic provided by: Freestockcharts.com.
 
LSPD.TO first began trading on the Toronto Stock Exchance (TSX) in March 2019 and LSPD followed suit on the NYSE in August 2019. Technically, the stock experienced three powerful breakouts in late 2020 that saw it rise nearly 800% from its March lows.

The question is, have these run-ups been justified? Clearly investors hope that the list of 2019-2020 acquisitions will boost stock value but will revenues justify the higher stock price and if so, when?

Suggested Reading:

Lightspeed POS website



Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. Matt has earned the Chartered Market Technician (CMT) designation. Follow Matt on Twitter at www.twitter.com/RatioTrade

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