Everyone loves a comeback. And right now, Lightspeed Commerce (TSX: LSPD) looks like a compelling comeback kid. Lightspeed stock has had its fair share of ups and downs over the past few years, but 2025 could finally be the year this mid-cap tech stock makes a strong comeback. After a tough period of slowing growth and profitability concerns, Lightspeed stock is showing signs of a turnaround, making it an intriguing opportunity for investors willing to bet on a recovery.
The numbers
In its third-quarter report for fiscal 2025, Lightspeed announced total revenue of $266.1 million, reflecting a solid 27% year-over-year increase. While the company still reported a net loss of $35.0 million, this was an improvement from previous quarters. Perhaps more importantly, Lightspeed stock achieved positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $10 million, signalling better cost control and improved operating efficiencies. Since profitability has long been a concern for investors, this development could be a turning point for the stock.
Looking at Lightspeed stock’s performance, the company has had a rough ride over the past year. Its market cap shrank from $4.24 billion in December 2023 to $2.87 billion by December 2024. The stock has also been volatile, currently trading around $18.73, down from its 52-week high of $26.60. However, there are reasons for optimism. The company’s forward price-to-earnings (P/E) ratio has improved to 25.64, suggesting that investors are beginning to price in stronger future earnings.
Potential for more
One of the biggest drivers for a potential rebound is Lightspeed stock’s renewed focus on high gross transaction volume (GTV) customers and its expansion into the European hospitality market. The company is targeting larger, higher-spending businesses, which could improve its margins and help it scale more efficiently. Furthermore, Lightspeed stock is doubling down on outbound sales efforts, a shift that could lead to stronger customer acquisition and retention in the coming quarters.
Analysts have mixed views on the stock. One analyst recently adjusted its price target for Lightspeed stock, lowering it from $18 to $15 while maintaining a “hold” rating. This suggests that while there is some caution around the stock’s short-term prospects, analysts are not writing off its long-term potential. Other investors have reduced their holdings in Lightspeed stock, but it remains a significant part of their portfolio, with over 500,000 shares still held.
A positive sign is Lightspeed stock’s strong balance sheet. The company has over $659 million in cash and only $21.96 million in total debt, giving it plenty of flexibility to invest in growth initiatives without the pressure of high-interest payments. This kind of financial stability is crucial for a company in transition. It allows Lightspeed stock to refine its strategy without being forced into drastic cost-cutting measures that could hurt long-term growth.
Bottom line
While the path to a full recovery is not guaranteed, there is growing confidence that Lightspeed stock is moving in the right direction. Its improving financials, focus on high-value customers, and expansion into new markets position it well for a rebound in 2025. If the company can continue executing its strategy and demonstrate sustained profitability, its stock could have significant upside potential.
For investors looking for a mid-cap Canadian tech stock with comeback potential, Lightspeed stock is worth considering. The risk remains, particularly given the company’s history of losses. However, with improving fundamentals and a clear strategy for growth, 2025 could be the year Lightspeed stock finally regains its shine.
