KeyStone’s Stock Talk Show Episode 253. 

Great to be recording on a sad day in my Canucks 2024 season as they were officially eliminated.  To start the show I will hit the viewer mailbag to answer a question Lightspeed Commerce Inc. (LSPD:TSX), a cloud vendor of omnichannel point-of sale software to retail and hospitality customers. A viewer asks if the stocks slide has finally been arrested with solid 2025 growth guidance and how the valuations look today with the stock just under $20? Aaron answers a viewer question on VinFast Auto Ltd. (VFS: NASDAQ), a Vietnamese electric vehicle manufacturer. Aaron reviews the money losing business through the lens of KeyStone’s profitability criteria. Brett answers a viewer question on Mogo Inc. (MOGO:TSX) a Canadian Fintech company, which offers an automated flat fee investment system under its subsidiary Moko, as well as digital loans and mortgage services. The company also owns 13% of Wonderfi, a Canadian crypto trading platform. He notes that while the company was clearly overvalued in 2021, is it a value today.  Finally, Brennan answers a viewer question on Verde AgriTech Ltd. (NPK:TSX), an agricultural company which produces and sells fertilizers in Brazil and internationally. We have reviewed the business a number of times in the past and suggested listeners avoid the stock – a viewer today asks if we have changed our opinion.

Let’s get to the show – we welcome my cohost, Mr. Aaron Dunn and the killer B’s, Brett, and Brennan.

Lightspeed Commerce Inc. (LSPD:TSX)

Stock Price$19.98
Market Cap$3.06 Billion


What does Lightspeed Commerce do?

Founded in Montréal, Canada in 2005, Lightspeed Commerce is a point-of-sale and e-commerce software provider. The company provides its software solutions to retail and hospitality customers primarily but even offers a leading golf course management software platform (I include that for Brennan’s benefit). Its software is used by >160,000 mid-market customers in North America, Europe and Australia.

A viewer asks that if the slide from around $150.00 in August of 2021 has finally been arrested with solid 2024 and 2025 growth guidance and how the valuations look today with the stock just under $20?

I will certainly take another look at Lightspeed, a stock we have reviewed here multiple times with the stock above $100 and as it slid from its ridiculous highs to its current $20 range 0 each time reiterating that until the company could actually prove its can produce a profit, the stock should be avoided. A take that has been spot on to date. Let’s start by looking at Lightspeed’s performance YTD in 2024.

Despite a pop after the company announced its Q4 FY 2024 numbers and FY 2025 outlook, the stock remains 23% down in 2024.

All time – over the past 5 plus years, Lightspeed has had a wild ride, pushing to insane valuations during the COVID tech bubble above the $150 range to basically back to is original trading range on listing. Despite, the silly valuations the stock has traded at it had produced nary a drop of cash flow.

Let’s look at the growth:

Revenues grew from $39.9 million in 2016 to $1.23 Billion in FY 2024 – tremendous growth. Despite this growth, the company continues to produce negative cash flow and even produced losses operationally in its latest fiscal year. The near-term optimism calls for “Adjusted Profitability” in FY 2025 (current year) after the company trumpeted its $1.3 million in total Adjusted EBITDA in FY 2024.

– we will take a quick look at whether the optimism is justified.

Q4 FY 2024 Highlights

  • Total revenue of $230.2 million, an increase of 25% year-over-year.
    • Transaction-based revenue of $139.0 million, an increase of 40% year-over-year.
    • Subscription revenue of $81.3 million, an increase of 7% year-over-year.
  • Net loss of ($32.5) million, or ($0.21) per share, as compared to a net loss of ($74.5) million, or ($0.49) per share.
  • Adjusted EBITDA of $4.4 million versus Adjusted EBITDA1 of ($4.3) million.
  • As at March 31, 2024, Lightspeed had $722.1 million ($4.72 per share) in cash and cash equivalents.

Balance Sheet:


Cash: $722.1 Million.

Debt: $nil

Net Cash: $722.1 Million.

Strong balance sheet, but..without internally generated cash flow, the cash balance has declined annually for the past 3-years. Nevertheless, the balance sheet is a definite strength. I will point out one observation from monitoring small and mid-cap companies for decades. In certain market cycles there are companies that luck into raising almost “too much” capital (which sounds like it should never be a bad thing) that the company does not operate like a good business should – that would be with a real eye to producing a profit, because the have this massive cash buffer. In this case, Lightspeed had nearly $1 billion in cash and no debt and a culture can develop where profitability (which is hard for a growing business) is not the goal and revenue growth, acquisitions and other goals become the target, because they are easier. And when the market finally asks the company to make some money (and it eventually always does), it can be difficult to to turn the ship and change the culture to one where expenses matter and create a meaningful bottom line. That is when you get a management team celebrating an annual Adjusted EBITDA figure of US$1.3 million off of revenues of UD$909 million.

Outlook – Guidance:

Financial Outlook:

Lightspeed expects to meaningfully expand Adjusted EBITDA profitability in the coming year while growing the company’s high Gross Transaction Volume or GTV customer base and subscription revenues. The company also expects to continue to increase the proportion of GTV that is processed through its payments platform. Lightspeed will continue to balance growth in both revenue and Adjusted EBITDA as it scales its business to beyond $1 billion in revenue.

The company expects subscription revenue growth to be better in the second half of the year than the first half. In addition, owing to the steep climb in Gross Payment Volume or GPV as a percentage of GTV that occurred in Fiscal 2024, transaction-based revenue growth is expected to be stronger in the first half of the fiscal year than the second half. As a result, the company’s outlook is as follows:

First Quarter 2025

  • Revenue of approximately $255 million to $260 million, with subscription revenue growth for the quarter consistent with Q4 2024.
  • Adjusted EBITDA of approximately $7 million.

Fiscal 2025

  • Revenue growth of at least 20%.
  • Adjusted EBITDA of a minimum of $40 million.

Let’s get into the valuations…


EV/revenue (TTM): 1.8

EV/aEBITDA (FY 2025e): 35.5x. (?)

PE (TTM): n/a

PE (FY 2025e): n/a


Overall, considering where Lightspeed has been in terms of continued annual losses, Q4 FY 2024 was a positive. But what gave investors more hope was the the FY 2025 guide which stated the business can grow at a >20% clip organically while driving better-than-expected margin expansion.

  • The company guided to Adjusted EBITDA for FY 2025 at a minimum of $40 million vs. consensus of $22.7 million – again, while adjusted profitability is moving in the right direction, I stress it is adjusted profitability and the guidance still implies only at 3.7% margin –  still very low.

In the end, celebrating a Fiscal 2024 Adjusted EBITDA figure of US$1.3 million off of revenues of UD$909 million is not great. The company should have focussed on producing cash flow years ago and its current profitability margins remain rather pathetic. The ship may finally be turning in the right direction, but it is not there yet, even if the company reaches the optimistic analyst estimates out there, the stock trades at over 35 times EV/EBITDA which is a premium valuation for a company that does not yet deserve the benefit of the doubt.

The growth and strong balance sheet is intriguing, but we find growth with real profitability elsewhere and continue to monitor Lightspeed near-term.

YSOT Mogo 253


Mogo Inc. symbol MOGO on both the Nasdaq and TSX is a Canadian Fintech company, the company operates a stock trading app MogoTrade, as well under the digital wealth platform the company offers an automated flat fee investment system under its subsidiary Moko, in addition, the company offers a digital loans and mortgage services.

Under the company’s Carta Worldwide subsidiary, the company offers card payment & processing programs.

As well the company owns 13% or 87 million shares of Wonderfi, a Canadian crypto trading platform.


The stock is currently trading at $2.38 Canadian down 26% over the last year. The market cap is $58 million Canadian.


However, if we zoom out we can see it has had an over 90% fall from its peak in early 2021. While the company was clearly overvalued in 2021, is it now?


Looking at the last quarter, Q1, 2024, the member count increased 5% to 2.1 million.

Mogo had revenue growth of 13% to $17.9 million.

Of which $10.7 million was from subscriptions and services and the remaining $7.2 million from interest revenue growing 13.2% and 12.5% respectively.

The company’s net loan portfolio which is gross loans less expected loan losses increased 1.3% to $62.5 million, so the majority of the interest growth was due to higher interest rates. Gross loans outstanding is at $76.0 million.

Adjusted EBITDA was flat at $1.0 million.

Adjusted Net loss fell to $4.0 million from a loss of $3.9 million. Adjusted net loss removes the impact of equity investment changes, namely Wonderfi as well as stock-based compensation as well as other non-operating expenses.

The company does guide the subscription and service revenue to grow in the mid-teens for 2024. Meaning you’ll be looking at high single digit for overall revenue growth assuming the interest revenue remains similar.


Switching to the balance sheet, the company is unsurprisingly in a net debt position as it does operate a loan service, so like a bank, it will borrow money in one way or another and lend out at hopefully a higher interest rate. The company has $11.8 million in cash, with $51.3 million in an outstanding credit facility, $36.3 million in outstanding debentures and $2.6 million in leases. The net debt including leases is $78.4 million.

The company’s debentures carry an interest rate of 8-10% and the credit facility charges SOFR a floating rate + 8%.  For the last quarter, the annualized rate for the credit facility was roughly 13%.

The debentures are due in 2025, which wil require refinancing or payment in shares which if elected would result in material dilution.

The company does have significant investments in crypto-related companies notably holding $28 million in Wonderfi, the Kevin O’Leary crypto exchange which we’ve previously done reviews of. The total cryptocurrency-related investments total $29.6 million which could be sold to cover debt if needed, so solvency or even liquidity is by no means an issue, but interest expense can create a drag on earnings.


The company is offering a new service within its stock trading platform allowing for direct investing with no transaction fees but with a $15 monthly fee. Mogo is calling this “Buffett mode” with the goal of reducing the gamification of investing. The app if available for Canadians and will likely compete directly against wealth simple given the mobile app focus.  The bit of irony here is the use of matrix-like colour with more retro gaming font to show they are trying to reduce gamification but I digress.


Moving to valuation,

As the company does not have positive net income we need to rely on adjusted EBITDA. The company has trailing EV to EBITDA of 17.8 times.


Putting it all together,

The company is expensive given its current debt levels and prospects.

The company is not near GAAP or adjusted profitability. Even when discounting the financing aspect of the credit line the debentures create an overhang that will either pull down earnings with interest or result in dilution. The company does have the option of liquidating its cryptocurrency investments to lower the leverage, which in my opinion would not be a bad option to clean up the balance sheet. The stock trading and wealth management is where I could see value grow within the company and will be looking forward to the launch of the direct investing app growth.

Overall, the company is by no means a write-off it does need to grow the bottom line to grow into the current price.


Verde AgriTech Ltd. (NPK:TSX) 

Price: $0.95

Market Cap: $38.98 million


Verde AgriTech is an agricultural company which produces and sells fertilizers in Brazil and internationally. The company offers multi-nutrient potassium fertilizer under the K Forte, BAKS, and Super Greensand brand names. It holds a 100% interest in the Cerrado Verde project, which is the source of potassium silicate rock.

Slide 2

We have covered Verde a few times on the podcast, the first was as a dog back in April 2023 following a decline of over 50% in three trading days after management cut guidance. And the second time was in September of 2023 as a Your Stock Our Tak when it traded in the $2.00 range.

And now that the stock is sub $1.00, and we have been asked a few more times to cover the stock. So here we go….

Slide 3

Verde’s Potash reserve is 5.9B tons of potash as approved by the Brazilian Mining Agency, they are currently permitted to mine 2.8M tonnes per year and have manufacturing capacity through its plant 1 & plant 2 for a combined 3M tonnes per year. Verde is also looking to expand this further with a new mine pit (pending permit approval) as well as an additional Plant #3 which could provide production capacity of up to 10M tonnes per year.

Slide 4

As I said when I covered the stock last year, on March 30th, 2023, Verde lowered its fiscal 2023 guidance from 2M tonnes of fertilizer sold, to a range of 800k-1.2M. And as I said at that time, the company appears to be  behind the low end of their revised guidance, and as such, they only sold 428,000 tons in FY2023. And produced a loss of $(0.11) per share, while they were guiding toward EPS in the range of $0.04-$0.29….

Slide 5

Looking at their Q1 2024 results, the company’s tonnes sold were down to 85,000, with total revenue of $5.1M which was down -54%, EBITDA was down to a loss of $(700k) compared to a gain of $2.0M in Q1 2023. And Net profit was also down substantially to a loss of $(4.75)M or $(0.09) per share.

And of course, the primary reason for the decline in sales was both the decline in tonnes sold & price of Potassium Chloride (which was down from about USD$500 per metric ton to approximately USD$300).

Slide 6

Quickly looking at the balance sheet, as of March 31, 2024, they had cash of $3.2M with debt of $45.7M which provides a net debt position of $42.5M. I will also note that in their past investor presentation from last year, they indicated that they would like to aggressively pay debt down and were looking to end the 2023 year with debt of $29M…. (obviously they didn’t achieve that).

They also noted in their Q1 2024 that subsequent to the quarter Verde initiated a Strategic Debt Restructuring Plan which includes seeking specific Preliminary Judicial Relief to obtain temporary protection against actions and foreclosures by 7 banks. This request is aimed at ensuring stability while the company renegotiates terms with its financial creditors. As such, all loan payment obligations have been suspended since April 2024. Negotiations with the banks are progressing.

Slide 6

Looking at the company’s FY 2024 guidance, they are looking at doing 700-800K tons of potash, revenue of $55M-$62.9M, with EBITDA of $8.9M-$12.2M and earnings of a loss of $(1.4M) to a gain of $500K.

And they are utilizing Potash prices of US$295 per ton with a 10% discount resulting in a final price of US$265 per ton.

Slide 8

To conclude….

My conclusion really isn’t too much different from my past summaries, the business is interesting, however it does not meet our initial investment criteria at this time. And I think the second slide of their recent investor presentation does a good job highlighting that the business is high risk, indicating that investors who are risk averse should not buy the stock.

In 2023 the business failed to meet its financial guidance – now, realistically it is extremely difficult to gauge the forward financials of a business when its operations are reliant on a volatile commodity.

But given our lack of confidence in the FY 2024 guidance, Verde’s elevated debt levels and overall lack of profitability at this time, the business remains too speculative for us.

If we put our trust in the FY 2024 guidance and say that the business can in fact reach the midpoint of their EBITDA target, the stock would be trading at 8x forward EBITDA and have a net debt to EBITDA multiple of over 4x (which is high in our opinion). And if we anticipate they can achieve the high end of net income, they would still be trading at 78x forward earnings. Again, for us, the risk outweighs the potential reward on the company, and we continue to monitor the business at this time to see how they progress in achieving their 2024 guidance.


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