While many tech stocks have had rebound years in 2023, thereâs still no shortage of them trading far below all-time highs. The tech sector as a whole has struggled to return to where it was just about two years ago.
Investors have had reasons to be optimistic this year, though. Plenty of tech stocks across the TSX have come roaring back in 2023.
Loading up on tech stocks today
Investors looking to add a little extra growth potential to their portfolios may want to consider loading up on a discounted tech stock or two today. However, Iâd caution investors to ensure that their time horizon is fit for owning a highly volatile investment.Â
One of the prices for owning a tech stock with market-crushing growth potential is volatility. If you’re willing to be patient during inevitable down periods, then you have nothing to worry about. In fact, now could be an incredibly opportunistic time to be buying discounted tech stocks.
With that in mind, Iâve reviewed a tech company that growth investors will want to have on their watch lists — especially while these bargain prices last.
On the surface, it may not seem as if much has changed for Lightspeed Commerce (TSX:LSPD) since it went public in 2019. The stock is trading today at just about the same price as it was when it joined the TSX. However, as shareholders know all too well, Lightspeed has been anything but a boring stock over the past couple of years.
At one point in 2020, shares were up a whopping 1,000% in a span of fewer than 12 months. Today, the stock is down close to 90% from all-time highs that were set in late 2021.Â
The business certainly has changed in recent years but nowhere near enough to cause that type of volatility. Iâd strongly argue that we witnessed a classic case of a stock that got far too ahead of itself. And in Lightspeed’s defence, many other high-growth stocks in the tech sector experienced similar pullbacks. The difference with Lightspeed is that it hasn’t had the same rebound year in 2023 as many of its peers have.Â
Strong Q2 earnings
Revenue growth certainly has slowed in the past couple of years but nowhere near enough to cause a 90% pullback. As we saw in the companyâs most recent earnings report, there is still a massive market opportunity thatâs up for grabs.
Lightspeed reported its 2024 fiscal second-quarter (Q2) results last week. Year-over-year (YoY) revenue growth came in at 25%, which was up from the 20% that the company saw earlier in Q1. YoY gross payment volume was also up 59%, compared to 56% in the quarter prior.
The market was pleasantly surprised by Lightspeedâs earnings report, sending the stock soaring nearly 20% by the end of the day.
Foolish bottom line
Even with the recent surge, Lightspeed is still valued at a market cap of only $3 billion. Based on the size of the global market opportunity in the commerce space that Lightspeed is chasing, thereâs certainly loads of multi-bagger growth potential here.
If youâre interested in owning a high-growth stock like Lightspeed, Iâd be prepared for more volatility. However, if youâve got the time horizon that allows you to be patient, this is a perfect beaten-down stock to take advantage of.
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