This 1 TSX share could destroy Shopify (TSX: SHOP) –

This 1 TSX share could destroy Shopify (TSX: SHOP) – fr

If there is one thing Shopify (TSX: SHOP) (NYSE: SHOP) has always been good, it defies expectations. It is the only title in recent history to have dethroned the king of the TSX, that is to say Royal Bank of Canada – for so long, and it has continued to grow beyond its valuation levels should capped it at.

If we discount the relatively “junior” performance over the past 12 months, Shopify has been one of the most powerful and consistent growth stocks on the TSX. It has grown by over 4,000% in the past six years, and while it may seem like the stock has lost momentum and reached its peak, Shopify still has plenty of room to grow.

But now there’s another competitor behind the scenes, waiting to dethrone Shopify as the ultimate e-commerce stock on the TSX.

Another e-commerce giant

Speed ​​of light (TSX: LSPD) (NYSE: LSPD) started out as a relative underdog. And although its market capitalization is only a fraction of that of Shopify (5.4%), Lightspeed has proven itself both as a powerful player in the ecommerce arena and as a growth stock. unbelievable. Take, for example, the progress of the past 12 months. Compared to Shopify’s 24% growth, Lightspeed a grandi about 150%.

And while this might not be a proper comparison, as it includes a real stock market crash, Lightspeed has grown more since its inception (if we compare Shopify for the same time period, that is, say about two years and two months). Lightspeed is also listed here and across the border, and it’s just as expensive as Shopify (if not more).

There are also differences. Shopify has posted positive net operating income over the past four quarters, while Lightspeed is still in red, but that only confirms the fact that Lightspeed is set to become the next Shopify.

Growth potential

Lightspeed takes a completely different approach to e-commerce. Unlike Shopify, which offers an online platform to build and manage an online ecommerce store (among others), Lightspeed offers seamlessly integrated point of sale solutions for SMBs. And if we compare Lightspeed POS to Shopify POS, the former has a definite advantage (since it is Lightspeed’s core competence).

Shopify is currently focused on the retail, restaurant, and golf business, which does not cover the full spectrum of potential ecommerce businesses. If Lightspeed begins to penetrate other relatively untapped market segments and begins to build its powerful international presence, national and international footprint, the business can grow at an unprecedented rate. The company also has a relatively loyal following, judging by its 91% repeat rate.

Stupid takeaways

If we just look at the evaluation, Lightspeed seems pretty expensive. But if the business is destined to follow in Shopify’s footsteps, it could continue to grow despite being overvalued. The stock also hasn’t fallen as steeply as most other tech stocks over the past 12 months. The e-commerce market is expected to continue to grow for at least a few years, and Lightspeed is in the process of growing up next to her.

Speaking of a TSX stock that has the potential to dethrone Shopify from the top spot …

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


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