Is Lightspeed (LSPD) a buy right now?
ATB Capital Markets analyst Martin Toner says Lightspeed Commerce’s (Lightspeed Commerce Stock Quote, Chart, News, Analysts, Financials TSX:LSPD)quarterly results should show steady payment growth as more merchants adopt its unified point-of-sale and payments platform.
In a July 20 preview, Toner maintained his “Sector Perform” rating and $18.00 target on Lightspeed.
“We expect total revenue to align with the company’s long-term targets, supported by an expanding base of gross payment volume,” Toner said.
The analyst said transaction-based revenue will be the key measure of operating momentum, supported by deeper payment penetration and higher average revenue per user. Investors will also be watching whether gross transaction volume can keep growing despite macro pressure on merchant activity.
Toner expects subscription revenue to show modest growth, helped by recent price increases and cost controls.
He said investors will also look for updates on new product features, including AI design tools, the global expansion of Lightspeed Capital and restaurant business intelligence tools. Toner said those products are important to retaining complex, multi-location merchants and supporting Lightspeed’s premium positioning.
Management is guiding for Adjusted EBITDA of 20% of gross profit and gross margin of 43% to 46%.
Toner’s $18.00 target is based on a discounted cash flow valuation, using a 16.0% discount rate and 2.5% terminal growth rate.
He expects Lightspeed to generate Adjusted EBITDA of $88.2-million on revenue of $1.25-billion in fiscal 2027, improving to Adjusted EBITDA of $135.9-million on revenue of $1.43-billion in fiscal 2028.
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Nick Waddell
Founder of Cantech Letter
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.