Lightspeed Commerce (TSX:LSPD) Could Be 42% Undervalued As Losses Narrow And Guidance Lands

Lightspeed Commerce (TSX:LSPD) just reported a narrower quarterly net loss alongside modest top line growth, issued fresh revenue guidance for the next quarter and full year, and updated investors on recent share buybacks.

The fresh guidance and buyback update arrive against a tougher share price backdrop. Lightspeed Commerce trades at CA$14.53, and the share price return has declined about 10% year to date, while the 1-year total shareholder return is down about 14%. This points to fading momentum despite recent progress on losses, revenue guidance, and capital returns.

Scan how Lightspeed Commerce compares with other payment and software players by reviewing the hand-picked 42 profitable AI stocks that aren't just burning cash that pair growth exposure with more established earnings power.

Lightspeed Commerce has cut its losses and kept buying back shares, yet the stock is still down sharply over one and five years. Has most of the rerating already happened, or is the real upside still in front of it?

Most Popular Narrative: 42% Undervalued

On the bullish analyst Narrative on Simply Wall St, Lightspeed Commerce screens as undervalued, with a fair value of about CA$24.97 against the CA$14.53 last close, and the whole case leans heavily on higher quality revenue and margin progress over time.

Lightspeed Commerce has shifted from divesting a declining, lower margin hospitality product line to concentrating product and capital on North America retail and European hospitality. This focus can improve average gross margin and earnings power if higher quality growth in these core regions continues to make up a larger share of revenue. Expansion of Lightspeed Capital, with merchant cash advance revenue growing more than 50% year over year and outstanding balances around US$115 million to US$118 million, introduces a financial services stream that can add higher margin revenue alongside payments and support a step up in gross profit and net margins.

See why 1 investors see Lightspeed Commerce as 42% undervalued.

Result: Fair Value of CA$24.97 (UNDERVALUED)

Still, the bullish Lightspeed Commerce narrative depends on hardware margin pressure easing and on future earnings actually lining up with the more optimistic analyst forecasts.

Find out about the key risks to this Lightspeed Commerce narrative.

Next Steps

If this mix of optimism and concern around Lightspeed Commerce feels familiar, treat it as a prompt to move quickly and test the data yourself. To weigh the potential upside against the open questions on the business, start with a clear view of its 3 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Lightspeed Commerce?

If Lightspeed Commerce has your attention, you can use that momentum and widen your opportunity set with a few targeted stock lists built from clear, rule-based filters.

• Target resilient balance sheets by scanning companies on the list of solid balance sheet and fundamentals (6 results) that pair financial strength with more durable fundamentals.
• Look for potential mispricings by reviewing the 6 high quality undervalued stocks that highlight quality businesses trading below their estimated worth.
• Add a cash income angle by checking out the 3 dividend fortresses that focus on higher yielding payouts with an emphasis on stability.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com