Lightspeed vs. Nuvei: Which Is the Better Tech Stock to Own Today?

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Lightspeed vs. Nuvei: Which Is the Better Tech Stock to Own Today?'s Profile


The Information Technology (IT) sector benefited from a rebound on the S&P/TSX Composite Index in mid-morning trading on May 7. Overall, the TSX Index was up 138 points at the time of this writing. Today, I want to look at two of the most exciting tech stocks available on the Canadian market. Lightspeed (TSX:LSPD)(NYSE:LSPD) and Nuvei (TSX:NVEI) are relative newcomers on the TSX that have rewarded shareholders over the past year. Which is the better buy today? Let’s jump in.

The rise of e-commerce has powered stocks like Lightspeed over the last year

Lightspeed is a Montreal-based company that provides commerce enabling Software as a Service (Saas) platform for small and midsize businesses, restaurants, retailers, and golf course operators. Shares of this tech stock have dropped 10% in 2021 as of late-morning trading on May 7. Lightspeed stock is still up 187% from the prior year.

The e-commerce market has gained huge momentum during the pandemic. According to United Nations trade and development experts, the sector saw a “dramatic” rise in its share of retail sales in 2020 from 16% to 19%. Moreover, Internet sales increased from one in five transactions in 2019 to one in four transactions in 2020.

I’d suggested that investors should look hard at Lightspeed stock last month. The company will unveil its final batch of fiscal 2021 results on May 20. In early May, Lightspeed announced that it will partner with the U.S. Small Business Administration to expedite hospitality industry relief. Restaurants and other service industries have been hammered by the pandemic. Lightspeed’s expertise could be key in the recovery efforts for many small and midsize business owners in the months ahead.

Nuvei: Why this tech stock IPO has me excited

Nuvei made its debut on the TSX in the middle of September 2020. Its shares started hot out of the gate. The tech stock has climbed 15% in 2021 at the time of this writing. It is set to release its first-quarter 2021 results on May 10. I’d suggested Nuvei as a great growth option in the latter half of April.

This company provides payment technology solutions to merchants and partners around the world. In 2020, Nuvei delivered revenue growth of 53% to $375 million and adjusted EBITDA jumped 87% to $163 million. The TSX newcomer also benefited from e-commerce growth in 2020. Total volume rose 76% to $43.2 billion and e-commerce represented 76% of total volume. That means Nuvei is well positioned to post growth on the back of the same trends that are propelling Lightspeed.

Nuvei possesses a strong balance sheet, and it is on track for good earnings growth in the quarters ahead. Yesterday, Nuvei announced that it was set to acquire the FinTech and cryptocurrency start-up Simplex for US$250 million. This will bolster the company’s ability to offer alternative payment methods.

Which tech stock should you snatch up right now?

Both tech stocks are well worth stashing for the long term, as the e-commerce sector erupts. However, I’m leaning towards Nuvei, as it has greatly improved its global footprint and just scored an attractive acquisition in the form of Simplex.

On the topic of Lightspeed stock…

Should you invest $1,000 in Lightspeed POS right now?

Before you consider Lightspeed POS, you may want to hear this.

Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now… and Lightspeed POS wasn’t one of them.

The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.



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