Scotiabank has adjusted its rating for Lightspeed (LSPD, Financial) from "Outperform" to "Sector Perform," with a reduced price target of $11, down from the previous $17. This revision reflects concerns regarding the company's significant reliance on discretionary retail sectors in the United States and hospitality markets in Europe. These areas are anticipated to face declining consumer demand, potentially impacting Lightspeed's financial outlook in the upcoming quarters.
The bank's analysis suggests that growth in point-of-sale system upgrades for Lightspeed may decelerate as businesses become more cautious in their purchasing decisions. This shift in merchant behavior could result in slower adoption rates for Lightspeed's offerings, potentially affecting the company's performance moving forward.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Lightspeed Commerce Inc (LSPD, Financial) is $13.90 with a high estimate of $20.53 and a low estimate of $9.00. The average target implies an upside of 35.69% from the current price of $10.24. More detailed estimate data can be found on the Lightspeed Commerce Inc (LSPD) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Lightspeed Commerce Inc's (LSPD, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lightspeed Commerce Inc (LSPD, Financial) in one year is $24.90, suggesting a upside of 143.16% from the current price of $10.24. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lightspeed Commerce Inc (LSPD) Summary page.
LSPD Key Business Developments
Release Date: February 06, 2025
- Revenue Growth: 17% year-over-year to approximately $280 million.
- Software Revenue Growth: 9% year-over-year to $88.1 million.
- Adjusted EBITDA: $16.6 million, ahead of the previously established outlook of $14 million.
- Gross Margin: Total gross margin at 41%, with software gross margin increasing to 79% from 76% last year.
- Transaction-Based Revenue: Grew 23% to $181.7 million.
- GPV (Gross Payment Volume): Increased 34% year-over-year to $8.8 billion.
- Lightspeed Capital Revenue: Grew to $10.2 million from $5.2 million in Q3 of last year.
- Total ARPU (Average Revenue Per User): Reached $533, a 19% increase year-over-year.
- Cash and Cash Equivalents: Approximately $662 million at the end of the quarter.
- Share Repurchase Program: Up to $400 million in cash to be returned to shareholders.
- Adjusted Free Cash Flow: Used approximately $0.5 million in the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lightspeed Commerce Inc (LSPD, Financial) achieved a 17% year-over-year revenue growth, aligning with their previously established outlook.
- The company reported a significant increase in payments penetration, rising from 29% to 38% compared to the same quarter last year.
- Lightspeed Commerce Inc (LSPD) raised its adjusted EBITDA outlook for the fiscal year to over $53 million, more than 30% higher than the initial outlook.
- The company announced a share repurchase program to return up to $400 million in cash to shareholders, indicating strong confidence in its financial position.
- Lightspeed Commerce Inc (LSPD) has successfully launched several new initiatives, contributing to a 9% year-over-year software revenue growth, the highest in the last nine quarters.
Negative Points
- Same-store sales in retail remain challenged across many verticals, although the rate of decline is easing.
- The strengthening US dollar is putting downward pressure on non-US dollar-denominated revenue, posing a headwind for the company.
- The company's fiscal fourth quarter is seasonally the weakest for GTV performance, which may impact overall financial results.
- There is a delay in realizing the benefits of the December restructuring, as it will take time to ramp up new hires in growth markets.
- Despite the increase in payments penetration, the quarter-to-quarter growth was closer to 1%, attributed to seasonality, which may affect the pace of reaching the year-end target.
