“Expert Recommendations for Investing in Lightspeed, Dialogue, and Ag Growth: Analyst Insights and Market Trends”

2023-05-11 22:13:47

Profit growth has been particularly attractive on the Canadian agricultural side, where demand is strong and comparables weak (drought in 2022), says Scotiabank. (Photo: 123RF)

What to do with titles from Lightspeed, Dialogue and Ag Growth? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.

Lightspeed Commerce (LSPD, $19.20): Powered by restoration

TD said continued demand from the restaurant industry should support Lightspeed’s growth over the course of the year.

Analyst Daniel Chan uses the results of Lightspeed’s American competitor, Toast, to perceive a positive signal. The Boston company unveiled revenues of US$819 million in the first quarter of 2023, up 53% compared to the same quarter in 2022. The number of points of service also grew (+37%), with the addition of 5500 of them.

Toast management expects point of service growth to continue throughout the year, including a second quarter that is expected to reach a record high. With its excellent start to the year, management has revised its forecast upwards, raising its revenue forecast by another 4%.

Daniel Chan recalls that consumers were back in restaurant dining rooms in the first quarter, with higher than expected gross sales volumes. The current trend is for demand for restaurants and “experience” dining to far outpace discretionary spending by the retail sector. He adds that May and June are traditionally strong months for restaurants, and that new restaurant openings should continue to climb in the short term.

The situation in the restaurant sector is positive for Lightspeed, the analyst believes. Even though most of the company’s hospitality customers are in the United States, robust restaurant and hospitality demand, combined with observations of strong consumer spending in the United States, is expected to propel Lightspeed.

While Toast’s international expansion plans risk adding competition outside of the United States, Daniel Chan believes this will not have a significant impact in the short term. Lightspeed should use its advantage to seize market share in Europe, but also to eat away at Toast in the United States, which dominates the market.

TD is maintaining its buy recommendation for Lightspeed stock, as is its target price of US$25.

Health Technology Dialogue (CARE, $3.64): Moving Toward Profitability

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