Lightspeed’s machine of perpetual growth
Investor exuberance has propelled the shares of Lightspeed POS Inc. ( LSPD. TO) skyward this year, rewarding the Montreal software firm for the big- ticket acquisitions with which it is consolidating its industry. Both Lightspeed and fellow online- payments software provider Nuvei Corp., also based in Montreal and discussed later in this column, are riding a North American boom in tech stocks that underlies the remarkable gains of the market as a whole during a pandemic- induced global recession.
With pro forma annualized revenues of just $ 309 million after accounting for its two latest major acquisitions, Lightspeed boasts total shareholder value of $ 8.9 billion. That’s not far shy of the $ 10.5billion value the market places on Canadian Tire Corp. Ltd., a company with about $ 14 billion in revenues.
Lightspeed is a provider of internet- based point- of- sale ( POS) and online payment products.
Investors in the firm believe it can match the speed at which it makes acquisitions ( six takeovers since it went public less than two years ago) with similar competence in smoothly integrating those takeovers. They’re also lauding Lightspeed for financing those acquisitions largely with its own stock, which of course holds the risk of diluting the stock’s value. They are sanguine about Lightspeed’s losses in each of the past five years, including a $ 71.2 million loss in the past four quarters. And about Lightspeed stock gains in the past year that have outpaced revenue growth by almost two to one.