Should you buy Shopify (TSX: SHOP) or Lightspeed (TSX: LSPD) stocks?

The TSX recovered its losses on September 13, 2021, after four consecutive trading days of decline. Energy (+ 42.98%) remains the best performing sector since the start of the year, followed by the technology sector (+ 31.03%). Shopify (TSX: SHOP) (NYSE: SHOP) gains 29.87%, although Trade at the speed of light (TSX: LSPD) (NYSE: LSPD) soars higher with 67.20%.

The tech sector was the winner on the TSX in 2020 and will most likely finish in the top three out of 11 sectors in 2021. If you were to invest for growth today, should you choose Shopify over Lightspeed or vice versa ?

Technological phenomenon

Shopify is the face of the TSX’s IT industry, if not the index itself. Canada’s largest publicly traded company returned 838.83% (110.67% CAGR) and 3,333.29% (102.68% CAGR) in the past three and five years, respectively. However, at the current share price of $ 1,866.68, the one-year price return is only 54.59%.

The $ 232.94 billion company has successfully lowered barriers to business ownership. Investors have made tons of money with Shopify, while entrepreneurs and merchants continue to grow their businesses through the ecommerce platform. Amy Shapiro, Chief Financial Officer of Shopify, said the company has been in full swing in the second quarter of 2021 (quarter ended June 30, 2021).

Shopify’s total revenue (subscription solutions and merchants) increased 78% from the second quarter of 2020. Net profit was US $ 2.29 billion, compared with a net loss of 55 , US $ 75 million over the same period last year. During the quarter, management said Shopify was busy helping merchants and developers build the future of internet commerce.

Along with the new features of the Shopify Fulfillment Network, there have been upgrades to Shop, Shop Pay, and Shopify Checkout. Shopify Capital has released a record $ 363 million in cash advances and loans to merchants. While Shopify expects industry growth trends to continue, the overall improvement in the business environment could slow the pace.

Shapiro believes consumer spending will start to return to offline services and retail in the second half of 2021. Nonetheless, the company expects more merchants to join the platform.

Long-term vision

Lightspeed Commerce is the new name for Lightspeed POS. The corporate name change on August 9, 2021 heralds massive growth on the horizon. Dax Dasilva, Founder and CEO of Lightspeed, said, “We are the one-stop-shop trading platform for traders around the world, so our company name needs to align with our current offering and vision at long term. “

The total return for tech stock in 2.52 years is an impressive 694.76% (127.59% CAGR). If you had invested $ 10,000 on March 8, 2019, you would be $ 79,476.19 richer today. Additionally, the current Lightspeed Commerce share price of $ 150.21 is 260% higher than it was a year ago.

In the first quarter of fiscal 2022 (quarter ended June 30, 2021), Lightspeed proudly announced an increase of 115%, 220% and 453%, respectively, in recurring subscription revenue, total revenue and revenue based on transactions compared to the first quarter of fiscal 2021. Net loss, however, increased 136% year over year.

Its chief financial officer and operations, Brandon Nussey, said: “Lightspeed achieved exceptional results this quarter as demand for our software and payment solutions was reinforced by the reopening of economies around the world. Nussey added that the strong recovery of its clients has helped accelerate the growth in gross transaction value.

Unlike Shopify, Lightspeed Commerce has increased its revenue forecast for fiscal 2022. The one-stop shopping platform expects revenue to be 130% higher than in fiscal 2021.

Faster growth

Shopify and Lightspeed Commerce address the pillars of savings. Small and medium-sized businesses thrive on their e-commerce platforms. However, it looks like Lightspeed could grow faster than Shopify in the post-pandemic world.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .

Foolish contributor Christopher Liew has no position on any of the stocks mentioned. The Motley Fool owns stock and recommends Lightspeed POS Inc. and Shopify. The Motley Fool recommends the following options: $ 1,140 long calls in January 2023 on Shopify and $ 1,160 short calls in January 2023 on Shopify.

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