Lightspeed Commerce is heading to $55, says ATB

ATB Capital Markets analyst Martin Toner is holding steady on Canadian e-commerce company Lightspeed Commerce (Lightspeed Commerce Stock Quote, Charts, News, Analysts, Financials TSX:LSPD) after reviewing just-released quarterly earnings. Toner reiterated an “Outperform” rating on LSPD in a Thursday report and C$55.00 target price, good for a projected return at the time of publication of 175 per cent.

Montreal-based Lightspeed delivered its fiscal fourth quarter 2023 results on Thursday for the period ended March 31, 2023, with the company showing Q4 revenue up 26 per cent year-over-year to $184.2 million and the revenue for the fiscal year up 26 per cent to $730.5 million. (All figures in US dollars except where noted otherwise.)

“I’m incredibly proud of the milestones we have accomplished this year. To go from nine distinct products to two powerful flagship platforms – Lightspeed Retail and Lightspeed Restaurant – has allowed us to simplify our organization, increase our focus on our target customers and accelerate our innovation engine,” said JP Chauvet, CEO, in a statement.

Up ahead, management guided for fiscal 2024 revenue of $875-$900 million and for “breakeven or better” adjusted EBITDA. For the Q1 2024, the outlook is for revenue of $195-$200 million and an adjusted EBITDA loss of approx. $10 million.

On the just-released quarter, Toner said the Q4 revenue was in-line with his estimate as well as the consensus forecast, while the adjusted EBITDA loss of $4.3 million was a beat of the consensus at negative $7.4 million. The net loss of $74.5 million was below consensus at $72.9 million. The analyst noted that Lightspeed merchants generated $20.2 billion of gross transaction volume (GTV) over the quarter, up ten per cent from a year earlier.

Toner said management is expecting stronger growth over the second half of the calendar year as it rolls out its unified payments platform.

“With the recent launch of unified Payments and POS, the Company expects revenue growth to build as the year progresses and believes that the Company is positioned to accelerate towards the Rule of 40 as it exits the fiscal year,” Toner wrote. 

“The Company also withdrew its previously issued target of 35 per cent-40 per cent annual organic subscription and transaction-based revenue growth. Unified POS and Payments could dramatically change the business; however, Lightspeed has not yet reflected the impact of the change in its guidance.