Lightspeed Commerce (TSX:LSPD): Reassessing Valuation After a 13% Share Price Slide Despite Ongoing Revenue Growth
Lightspeed Commerce (TSX:LSPD) has been quietly repriced by the market over the past month, with shares sliding about 13% even as the business continues to grow revenue at a double digit clip.
See our latest analysis for Lightspeed Commerce.
That recent 30 day share price return of minus 12.7 percent sits on top of a much tougher backdrop, with the year to date share price return down close to 30 percent and the 1 year total shareholder return falling even further. This suggests momentum is still fading despite ongoing revenue growth and improving profitability narratives.
If Lightspeed’s reset has you reassessing your tech exposure, it could be a good moment to explore other high growth tech and AI names through high growth tech and AI stocks.
With shares now trading at a steep discount to both analyst targets and some estimates of intrinsic value, yet still weighed down by years of losses, investors face a key question: is this a mispriced growth story, or has the market already baked in the recovery?
Most Popular Narrative: 20.8% Undervalued
With the most followed narrative placing Lightspeed Commerce’s fair value meaningfully above the last close of CA$16.04, the story hinges on execution, scale and improving margins.
Strengthening operating leverage and improving adjusted EBITDA, driven by a disciplined focus on cost management even as investments in sales/product increase, are expected to support continued margin expansion and improved future net earnings.
Curious how modest top line growth, rising payment penetration and a sharp margin reset could still justify a higher valuation? Unpack the full roadmap behind this fair value call and see which long term earnings and cash flow assumptions have to land for the story to work.
Result: Fair Value of $20.26 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, sustained losses and intense competition from larger payments and POS rivals could derail margin expansion expectations and limit any valuation re rating.
Find out about the key risks to this Lightspeed Commerce narrative.
Build Your Own Lightspeed Commerce Narrative
If you see the numbers differently or would rather dig into the details yourself, you can build a complete view in minutes: Do it your way.
A great starting point for your Lightspeed Commerce research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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