Is Lightspeed POS' (TSE:LSPD) Share Price Gain Of 207% Well Earned?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. Take, for example Lightspeed POS Inc. (TSE:LSPD). Its share price is already up an impressive 207% in the last twelve months. On top of that, the share price is up 40% in about a quarter. Lightspeed POS hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Lightspeed POS

Given that Lightspeed POS didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last twelve months, Lightspeed POS' revenue grew by 84%. That's stonking growth even when compared to other loss-making stocks. Meanwhile, the market has paid attention, sending the share price soaring 207% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Lightspeed POS in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Lightspeed POS shareholders have gained 207% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 40%. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Lightspeed POS has 3 warning signs we think you should be aware of.

Lightspeed POS is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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