LSPD Stock Forecast & Price Target

Lightspeed Commerce is a cloud-based commerce platform with a diverse customer base that spans geographies and industries. The company has a strong focus on providing its customers with a seamless omnichannel experience and generates recurring revenue through software fees and financial services fees. Despite a decrease in revenue and adjusted EBITDA projections for fiscal 2027, the company is expected to see growth in fiscal 2028 due to better location growth. The stock may be undervalued with a price target of $10 based on a 38x P/E multiple applied to the CY2027 adjusted EPS estimate of $0.27, and there is potential for upside from increased conversion and expansion and potential M&A activity. However, there are downside risks to the rating and price target, including less expense flexibility and rising exposure to self-origination loans.

Lightspeed Commerce is facing a potential slowdown in organic gross profit growth and is below its projected target range; the recent sale of Upserve further complicates its financials, and while management has beaten and raised in the past, it's uncertain if they will be able to do so again. Despite strong location growth and the potential for accelerating software revenue and ARPU in FY27, there is limited near-term upside potential due to macroeconomic conservatism and a slower pace of growth expected for the year. The current valuation is attractive, but there are risks of lower-than-expected growth and potential balance sheet concerns, leading to a Hold rating and a lowered price target of $11 per share.