Valued at a market cap of $2.2 billion, Lightspeed Commerce (TSX:LSPD) is a software company that provides cloud-based commerce platforms and payment solutions for retailers, restaurants, golf courses, and other businesses across multiple countries.
Its integrated platform enables omnichannel experiences, connecting suppliers, merchants, and consumers through comprehensive point-of-sale systems, inventory management, analytics, and payment processing.
Lightspeed offers specialized solutions, including Lightspeed Restaurant for the hospitality industry, Lightspeed Retail for commerce, and Lightspeed Golf for golf course operators.
The platform features multi-location connectivity, employee management, customer loyalty programs, and e-commerce capabilities. Additionally, Lightspeed offers financial services through Lightspeed Payments and Capital, as well as hardware sales, including tablets, printers, and accessories, along with installation services to support business operations.
The TSX tech stock went public in 2019 and touched an all-time high in 2021. Today, LSPD stock is down almost 90% from all-time highs.
Is Lightspeed stock a good buy right now?
Lightspeed Commerce delivered mixed results in fiscal Q4 (ended in March) while unveiling a comprehensive transformation strategy designed to drive sustainable, profitable growth.
The fintech operator achieved its first US$1 billion revenue milestone in fiscal 2025 and delivered US$53.7 million in adjusted EBITDA (earnings before interest, tax, depreciation, and amortization), an improvement from US$1.3 million in the prior year.
Lightspeed has strategically refocused on two core growth engines where it maintains competitive advantages: North American retail and European hospitality. These markets represent a combined US$80 billion total addressable market, with near-term focus on US$21 billion in opportunities.
Lightspeed’s decision to concentrate efforts reflects strong product-market fit, evidenced by approximately 35% close rates in both segments. Management outlined aggressive expansion plans, including scaling the outbound sales capacity to over 150 representatives and increasing product development spending by 35%.
The company targets 10–15% annual customer location growth and 20–25% gross profit growth over the next three years. Consolidated metrics include a 15–18% gross profit CAGR (compounded annual growth rate) and a 35% adjusted EBITDA CAGR through fiscal 2028.
Software ARPU (average revenue per user) expansion remains a key driver, growing 11% year-over-year in Q4 through module adoption and pricing optimization. Payment penetration reached 40% in April, with continued upside as new customers must adopt integrated payment solutions. Lightspeed’s NuORDER wholesale network, connecting retailers to over 4,000 brands, creates significant competitive differentiation and stickiness.
Despite macro headwinds impacting same-store sales, Lightspeed demonstrates operational resilience through its diversified platform approach. It returned over US$130 million to shareholders through share repurchases and announced additional buyback authorization, reflecting confidence in the strategic pivot.
Is the TSX tech stock undervalued?
Analysts expect Lightspeed’s revenue to grow from US$1.1 billion in fiscal 2025 to US$1.6 billion in fiscal 2029. Comparatively, adjusted earnings are forecast to expand from US$0.45 per share to US$1.14 per share in this period.
Similar to other asset-light tech stocks, Lightspeed is positioned to benefit from operating leverage. While revenue is forecast to grow by 10.5% annually, earnings growth is estimated at 26%.
If LSPD stock is priced at 25 times forward earnings, which is reasonable, it should trade around US$28 in June 2028, indicating an upside potential of over 150% from current levels.
With focused market concentration, enhanced product innovation, and disciplined capital allocation, Lightspeed appears well-positioned to capture market share in its targeted segments while improving profitability metrics over the three-year outlook period.
