Following the company’s most recent quarterly results, Industrial Alliance Securities analyst Neehal Upadhyaya remains bullish on Lightspeed Commerce (Lightspeed Stock Quote, Chart, News, Analysts, Financial TSX:LSPD)
On August 3, LSPD reported its Q1, 2024 results. The company lost (US) $48.7-million on revenue of $209.1-million, a topline that was up 20 per cent over the same period last year.
“This quarter saw several promising trends continue, all of which are worth highlighting,” said CFO Asha Bakshani. “Gross payments volume showed substantial growth, while customer acquisition costs and churn remained in line with previous quarters. Given this strong start to the fiscal year, I believe we are on course to deliver adjusted EBITDA break-even-or-better in fiscal 2024 — establishing a strong foundation for durable long-term growth.”
The analyst characterized the quarter.
“Q1/F24 revenues came in at ~$209M, ahead of our estimate and consensus at ~$197M and ahead of guidance of $195-200M,” he said. “The beat was mainly due to higher-than-expected transactions-based revenue as payment penetration rates breached the 20% threshold reaching 21.8%. Adj. EBITDA came in at ~($7M), ahead of our estimate, consensus, and guidance of ~($10M). The beat was due to higher-than-expected revenues along with a significant decrease in OpEx, as spend across the board was below historical averages as a percentage of revenue. The beat in Adj. EBITDA was not larger simply due to lower margins recognized of 42%, which came in below both Q1/F23 at ~45% and last quarter at 47%. Had LSPD achieved margins closer to the midpoint between last year and last quarter, Adj. EBITDA would have been positive.”
In a research update to clients August 4, Upadhyaya maintained his “Buy” rating and one-year price target on LSPD, implying a return of 32 per cent at the time of publication.
The analyst thinks Lightspeed will post Adjusted EBITDA of (US) $8.6-million on a topline of $904-million in fiscal 2024. He expects those numbers will improve to EBITDA of $48.5-million on revenue of $1.22-million the following year.