LSPD vs DND: Which TSX tech stock to watch in February?

Highlights

• Recent technological innovations have helped the Canadian technology sector to perform better than other sectors.
• Lightspeed is eliminating roughly 10% of its operational costs related to the workforce.
• Dye & Durham reported a 7 per cent increase in revenue for the first quarter of 2023.

The Canadian equity market has been under several economic pressures recently, including high-interest rates, the Russia-Ukraine crisis, growing inflation, and the global COVID-19 pandemic.

Since the beginning of this year, the tech sector seems to have an upward momentum. However, that does not mean that it will continue like this as anything can happen in a stock market, given the volatility factor.

The S&P/TSX Capped Information Technology Index had gained 15.8 per cent month-to-date at the time of writing. Reportedly, rapidly evolving technology, cutting-edge applications, and competitive advantage are a few driving factors behind this growth.

In light of the above, let’s see how these two TSX-listed technology stocks have performed lately:

Lightspeed Commerce Inc. (TSX: LSPD)

Lightspeed Commerce Inc., a Canadian one-stop commerce platform with operations in over 100 countries, assists retailers in streamlining, scaling, and offering impeccable consumer experiences. Lightspeed, listed on the TSX and NYSE, has its reach in North America, Europe, and Asia Pacific.

Recently, Lightspeed informed its shareholders that it was restructuring its operating strategy to put more of an emphasis on profitable growth. Under this procedure, the company plans to eliminate 300 positions or 10% of the operating costs associated with headcount at Lightspeed. Among these roles, management layers will bear half of the cost reduction.

Lightspeed expects a C$ 12-C$ 14 million further restructuring cash charge in its fourth-quarter earnings. The LSPD stock surged about 21 per cent year-to-date (YTD).

Dye & Durham Limited (TSX: DND)

As a provider of cloud-based software and technology solutions, Dye & Durham Limited works to boost productivity and efficiency for professionals in the legal and business fields. Government agencies, financial institutions, and law firms are among the customers of this information technology company, which has operations in Canada, the UK, Ireland, and Australia.

With an annualized dividend yield of 0.355 per cent, the business paid its shareholders a quarterly cash dividend of C$ 0.019 per share.

In December 2022, Dye & Durham announced to purchase 10,344,827 of its common shares at a cash price of C$ 14.50 per common share under its substantial issuer bid. The aggregate cash consideration will total around C$ 150 million.

Additionally, as of November 10, 2022 (the date the offer was made public), the common shares acquired under the offer represented roughly 15.6 per cent of the issued and outstanding common shares on a non-diluted basis.

Dye & Durham Limited improved its revenue by 7 per cent from the prior comparable period to C$ 120.2 million in the first quarter of 2023. The company’s adjusted EBITDA also increased to C$ 64.4 million in Q1’23 from Q1’22.

The DND stock had surged 25.7 per cent YTD as of writing, according to TradingView data. 

Bottom Line

Looking at the volatility factor in the stock market, investors are advised to stay extra cautious before putting their money in tech or any other stocks.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.