Lightspeed gets its notch back as the stock bounces more than Shopify

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Lightspeed Commerce Inc., the Montreal-based maker of retail software, is getting back on track.

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The company’s stock rose nearly 40 percent last week, a glimmer of hope for a company that began speaking as a rival to e-commerce heavyweight Shopify Inc during the epidemic and then stumbled badly in an attack from a short seller and a wide retreat of investors from digital upstart. Which puts growth ahead of profit.

May 19 Lightspeed reported that revenue for the quarter ended March 31 increased 78 percent from a year earlier, as Covid-19 restrictions allow Lightspeed’s software to completely reopen restaurants, independent retailers, golf clubs and other retailers.

The loss has expanded to 77 cents compared to a loss of 34 cents per share in the same period in 2021, but the company says it is on track to achieve revenue growth of about 35 per cent by March 2024. The forecast marked the first time Lightspeed set a timeline for profitability.

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“We’re delivering what we’re going to say,” chief executive Jean-Paul Chauvette said in an interview with the Financial Post’s Larissa Harapin. “Our investors are going to see this at any time and the stock should follow. We are focusing on what we can control. We are building a long term company. We want a company that can create a ton of value in the long run. ”

We are providing what we are going to say

Jean-Paul Chauvet

Lightspeed’s stock price was trading around $ 30 per share on the morning of May 20, up nearly 40 percent since May 11, and even most of the recent news from global stock markets has been negative. Long ago, the S&P / TSX composite index changed slightly, and Lightspeed’s main competitor in digital trading was Shopify Inc. Technology losses have risen just three percent since returning to pre-epidemic levels earlier this month.

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Adolescence was rocky for Lightspeed, which made a big splash in Toronto in January 2019, 14 years after Dax Dasilva started the company in an off-the-track corner of Montreal.

Lightspeed, which initially focused on point-of-sale software for restaurant and mom-and-pop retailers, was walled off by early wave-following lockdowns. Its share price fell 72 percent to $ 13.50 on March 20, 2020, from its previous August high, as COVID-19 restrictions forced many of its clients to close.

Investors changed their minds when it became clear that vaccines would allow the fast-paced economy to rebound, and stocks rose to 8 168.84 in September 2021, as traders were excited about digital-based growth firms.

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That tension has been replaced by concerns about the acceleration of global inflation. Even after this week’s pop, shares of Lightspeed have been down nearly 40 percent since the beginning of the year, as investors generally sway stocks amid rising prices and concerns that central banks could bring inflation under control.

Lightspeed has had to contend with allegations from short-seller Spruce Point Capital Management LLC that it is inflating many of its performance metrics, the company said in a statement. In February, the company announced that Dasilva was stepping down as CEO, a natural change of leadership that still created additional uncertainty.

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Chauvet, a Lightspeed executive since 2012 who served as president when he took over as CEO, stressed that the company was in a “strong position”. After executing a string of acquisitions due to rising stock prices during the epidemic, he said the priority now is to focus on “operational efficiency”.

Chauvet said he was not concerned about the growing threat of a recession, suggesting that the recession could be good for Lightspeed as well, as its software platform is poised to increase efficiency by integrating online and in-store sales and inventory management.

“Our customers need to do more with less in that context,” he said. “That’s what Lightspeed does. We help them automate the process. We automatically help their workflows with how they work with suppliers. So, that should be a strong move for companies like ours. “

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