Lightspeed stock. Buy, Sell or Hold?

ATB Capital Markets analyst Martin Toner maintained a Sector Perform rating and $19.00 price target on Lightspeed Commerce (Lightspeed Commerce Stock Quote, Chart, News, Analysts, Financials TSX:LSPD) in a Jan. 28 third-quarter fiscal 2026 preview, saying the equity story continues to hinge on improving execution against a backdrop of persistent investor skepticism.

Ahead of Lightspeed’s Q3/FY26 results on Feb. 5, Toner said the company’s operational progress, particularly its shift toward higher-GTV flagship merchants in North American Retail and European Hospitality, has yet to be fully reflected in the share price, with the stock down roughly 26% over the past year. In his view, macro uncertainty and ongoing pressure on the payments sector continue to overshadow company-specific improvements.

Toner said management’s focus on Unified Payments has narrowed the gap between gross transaction value and gross payment volume, supporting higher gross margins and driving Adjusted EBITDA growth. Payment penetration reached 43% of GTV in the most recent quarter, up 14% year over year, while overall gross margins rose to 42%.

He said the key question for investors remains whether Lightspeed can sustain merchant growth while continuing to improve profitability.

Operationally, the company added about 2,000 net new locations in the prior quarter, representing 7% year-over-year growth, and pushed total monthly ARPU to a record $685, up 15% year over year. Toner said that while overall GTV growth was modest, the data suggest Lightspeed is deliberately trading lower-tier churn for larger merchants with higher lifetime value, a strategy he views as rational given customer acquisition costs in the SMB segment.

From a valuation perspective, Toner said Lightspeed remains inexpensive at roughly 1.0x next-twelve-month price-to-sales, but added that upside will likely remain capped until the company demonstrates it can consistently grow locations while maintaining margin gains.

His $19.00 target implies a 22% return and is based on a discounted cash flow model using a 16.0% discount rate and a 2.5% terminal growth rate. He said the discounted terminal value of about $692-million represents roughly half of total enterprise value and implies multiples of 7.7x EV/EBITDA and 1.1x EV/revenue.

Looking ahead to the quarter, Toner said he will be watching for confirmation that transaction-based revenue can continue to scale without a commensurate increase in overhead, signaling true operating leverage. He cautioned, however, that it remains too early to expect meaningful EBITDA margin expansion as the company continues to reinvest in growth initiatives.

Toner forecasts that Lightspeed will generate $97.9-million in Adjusted EBITDA on revenue of $1,333.9-million in fiscal 2026, improving to $121.3-million in Adjusted EBITDA on revenue of $1,376.2-million in fiscal 2027.

Founded in Montreal in 2005, Lightspeed provides cloud-based point-of-sale, payments and e-commerce software to retail, hospitality and golf customers in more than 100 countries.

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