Can LSPD Stock Finally Recover in 2024?

Shares of Lightspeed Commerce are down 90% from all-time highs. Is LSPD stock a good buy right now?

| More on:
stock analysis

Image source: Getty Images

Shares of Canada-based fintech company Lightspeed Commerce (TSX:LSPD) have taken investors on a roller-coaster ride since its IPO (initial public offering) in 2019. Lightspeed priced its IPO at $16 per share, and the stock touched a record high of $160 in September 2021.

In late 2021, a short-seller report from Spruce Point Management accused Lightspeed of inflating several metrics, such as its total addressable market, customer count, and gross transaction volume (GTV), sending the stock spiralling downwards.

In the report, Spruce Point claimed it found evidence where Lightspeed overstated its customer count by 85% and GTV by 10%. It also emphasized Lightspeed was wrestling with declining organic growth even though the fintech entity claimed its average revenue per user was increasing.

Today, LSPD stock trades 89% below all-time highs, allowing you to buy the dip. Valued at a market cap of $2.65 billion, is Lightspeed stock a good buy right now? Let’s see.

The bull case for Lightspeed stock

Lightspeed offers a cloud-based commerce platform connecting suppliers, customers, and merchants. Its software platform provides customers with critical functionally to manage operations, accept payments, and grow their businesses.

Over the years, Lightspeed has primarily targeted small and medium businesses in verticals such as retail and restaurants as well as golf course operators. A majority of the company’s sales are recurring in nature, resulting in stable cash flows across market cycles.

Since the start of fiscal 2024 (ending in March), Lightspeed has been selling its PoS (point-of-sale) and payments solutions in a unified offering. This allows it to streamline support and billing, resulting in higher customer engagement and retention rates.

Lightspeed emphasized its platform is built to scale and can support customers as they open new locations. For instance, Lightspeed’s robust platform can offer sophisticated solutions as business requirements become more complex.

What’s next for LSPD stock?

In the fiscal third quarter (Q3) of 2024, Lightspeed reported revenue of US$239.7 million, an increase of 27% year over year. Lightspeed’s transaction-based revenue stood at US$147.8 million in fiscal Q3 of 2024, rising 38% from the year-ago period, primarily driven by increased customer adoption of its payments solutions. Comparatively, subscription sales rose 9% to US$80.9 million.

The Canadian tech company reported an adjusted net income of US$11.8 million or US$0.08 per share, compared to a net income of just US$400,000 in the year-ago period. Lightspeed stated its ARPU (average revenue per user) rose 28% to US$447, up from US$348 in the year-ago quarter.

Analysts tracking LSPD stock expect its earnings per share to improve to $0.21 in fiscal 2024, compared to a loss of $0.22 per share in 2023. Further, adjusted earnings are forecast to expand to $0.27 per share in fiscal 2024.

Lightspeed ended 2023 with US$749.4 million in cash, providing it with some flexibility to support its burn rates in the near term.

Investors would want Lightspeed to deliver consistent profits while growing the top line at a steady pace amid an uncertain and challenging macro environment. Analysts remain bullish on LSPD stock and expect shares to surge by roughly 50% in the next 12 months, given consensus price target estimates.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

More on Tech Stocks

healthcare pharma
Tech Stocks

Here Are 3 Phenomenal Reasons to Buy Well Health Stock Right Now

Well Health stock has been hit hard in the last three years, yet fundamentals remain strong and keep hitting records.

Read more »

Target. Stand out from the crowd
Tech Stocks

1 Growth Stock I’m Buying Hand Over Fist Despite the Market’s Pessimism

This growth stock has been on a tear in 2023 and 2024, with even more likely for this year and…

Read more »

investment research
Tech Stocks

A Top Tech Stock Every Beginner Investor Should Own

Constellation Software (TSX:CSU) stock looks more like a must-buy for investors seeking tech at a reasonable price.

Read more »

healthcare pharma
Tech Stocks

Why WELL Health Fell 11% on Thursday

WELL Health (TSX:WELL) stock had a huge climb and an even larger fall. And that fall continued this week after…

Read more »

Meeting handshake
Tech Stocks

Apple Just Bought a Canadian AI Company: Why That’s a Big Deal for TSX Tech

Docebo (TSX:DCBO) is another impressive AI company in the Canadian tech scene that's overlooked by many.

Read more »

sad concerned deep in thought
Tech Stocks

Down 24% From All-Time Highs, Is Open Text Stock a Good Buy Right Now?

Open Text is a tech stock trading at a massive discount to consensus price target estimates in 2024.

Read more »

stock analysis
Tech Stocks

Could Lightspeed Commerce Stock Help You Become a Millionaire?

Lightspeed (TSX:LSPD) stock has hit major highs but remains at its lowest lows. So, what would it take to surge…

Read more »

Man holding magnifying glass over a document
Tech Stocks

Stock-Split Watch: Is Constellation Software Next?

Constellation Software (TSX:CSU) shares cost nearly $4,000. Will the company do a stock split?

Read more »