Critical Contrast: Lightspeed Commerce (NYSE:LSPD) & Karooooo (NASDAQ:KARO)

Lightspeed Commerce (NYSE:LSPD) and Karooooo (NASDAQ:KARO) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Lightspeed Commerce and Karooooo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lightspeed Commerce	2	12	5	0	2.16
Karooooo	0	1	5	0	2.83

Lightspeed Commerce currently has a consensus target price of $13.66, indicating a potential upside of 26.56%. Karooooo has a consensus target price of $58.25, indicating a potential upside of 16.38%. Given Lightspeed Commerce’s higher probable upside, equities research analysts clearly believe Lightspeed Commerce is more favorable than Karooooo.

Institutional & Insider Ownership

68.7% of Lightspeed Commerce shares are owned by institutional investors. 74.7% of Karooooo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Lightspeed Commerce has a beta of 2.08, suggesting that its stock price is 108% more volatile than the S&P 500. Comparatively, Karooooo has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Valuation and Earnings

This table compares Lightspeed Commerce and Karooooo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lightspeed Commerce	$1.16 billion	1.27	-$667.20 million	($4.55)	-2.37
Karooooo	$249.96 million	6.19	$50.38 million	$1.85	27.05

Karooooo has lower revenue, but higher earnings than Lightspeed Commerce. Lightspeed Commerce is trading at a lower price-to-earnings ratio than Karooooo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lightspeed Commerce and Karooooo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lightspeed Commerce	-59.16%	0.39%	0.36%
Karooooo	19.45%	31.83%	20.14%

Summary

Karooooo beats Lightspeed Commerce on 9 of the 13 factors compared between the two stocks.

About Lightspeed Commerce

Lightspeed Commerce Inc. engages in sale of cloud-based software subscriptions and payments solutions for small and midsize businesses, retailers, restaurants, and golf course operators in North America, Europe, the United Kingdom, Australia, New Zealand, and internationally. Its Software as a Service platform enables customers to engage with consumers, manage operations, accept payments, etc. The company's cloud platforms are designed interrelated elements, such as omni-channel consumer experience, a comprehensive back-office operations management suite to improve customers' efficiency and insight, and the facilitation of payments. Its platform functionalities include full omni-channel capabilities, point of sale (POS), product and menu management, employee and inventory management, analytics and reporting, multi-location connectivity, order-ahead and curbside pickup functionality, loyalty, and customer management solutions. The company also offers tailored financial solutions, such as Lightspeed Retail, Lightspeed eCommerce, Lightspeed Restaurant, and Lightspeed B2B solutions. In addition, it sells hardware, including tablets, customer facing displays, receipt printers, networking hardware, cash drawers, payment terminals, servers, stands, bar-code scanners, and an assortment of accessories, as well as provides installation and implementation services. The company was formerly known as Lightspeed POS Inc. and changed its name to Lightspeed Commerce Inc. in August 2021. Lightspeed Commerce Inc. was incorporated in 2005 and is headquartered in Montreal, Canada.

About Karooooo

Karooooo Ltd. provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States. The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics. It provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles. In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products. It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices. Karooooo Ltd. was founded in 2001 and is headquartered in Singapore.