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On Friday, Scotiabank (TSX:BNS) analyst Paul Steep adjusted the price target on Lightspeed POS (TSX:LSPD) Inc. (NYSE:LSPD) to $10.00, down from the previous $11.00, while maintaining a Sector Perform rating on the stock. Currently trading at $10.53, InvestingPro analysis suggests the stock is undervalued despite showing a -30.86% year-to-date return. Steep’s reassessment follows Lightspeed’s fourth-quarter performance, which aligned with expectations, and the company’s fiscal year 2026 outlook that cautiously anticipates a stronger second half of the year driven by new sales strategies and product innovations.
The lowered price target reflects revised downward estimates, particularly for fiscal year 2027. Despite this adjustment, the analyst notes that the stock has support, trading at 1.6 times the calendar year 2026 gross profit and 10.2 times the calendar year 2026 EBITDA. According to InvestingPro data, management has been aggressively buying back shares, a move that typically indicates confidence in the company’s future. The company maintains strong financial health with a current ratio of 5.36, indicating ample liquidity to meet short-term obligations.
Steep comments on the current position of Lightspeed, suggesting a more favorable outlook for the latter half of the year. With revenue growth of 18.43% in the last twelve months, the company shows promising momentum. The analyst anticipates an improvement in Gross Transaction (JO:NTUJ) Volume (GTV) growth as same-store sales trends are expected to shift from the current declines to more positive figures. This is in line with the company’s efforts to accelerate key location growth into the mid-single-digit range, up from current low-single-digit growth, aiming to reach its three-year compound annual growth rate goal of 10%-15%. Unlock deeper insights into Lightspeed’s financial health and growth potential with InvestingPro, featuring exclusive ProTips and comprehensive analysis in our Pro Research Report.
The analyst’s neutral stance is largely due to a preference to see better growth in customer locations and GTV trends before adopting a more constructive view on the stock. The expectation is that Lightspeed will emerge as a stronger performer in the second half of the fiscal year, as projected improvements in GTV growth and key location expansion begin to materialize. The company, currently valued at $1.45 billion in market capitalization, continues to focus on strengthening its market position.
In other recent news, Lightspeed POS Inc. reported a significant milestone by surpassing $1 billion in annual revenue for the first time during the fourth quarter of 2025. The company disclosed a revenue of $253.4 million for the quarter, slightly above the forecast of $252.37 million, though its earnings per share (EPS) of $0.10 fell short of the anticipated $0.11. Lightspeed’s adjusted EBITDA saw a substantial increase, rising from $1.3 million to $53.7 million year-over-year. Additionally, the company announced a 40% year-over-year rise in gross payments volume, reflecting its strategic focus on expanding product offerings.
Benchmark analysts maintained a Buy rating for Lightspeed stock, with a steady price target of $16.00, following the company’s earnings report. The analysts emphasized the company’s successful transition to a phase of execution and highlighted the guidance for fiscal year 2026, which indicates a revenue growth target of 10-12% and a gross profit growth of approximately 14%. Lightspeed’s strategic pivot is expected to drive its operational and financial trajectory in the new fiscal year.
The company also reported an 18% increase in annual revenue, reaching $1.077 billion, and a significant rise in software ARPU by 11% year-over-year. In terms of future outlook, Lightspeed projects adjusted EBITDA to be between $68 million and $72 million, with an emphasis on increasing customer locations and payments penetration. The company’s ongoing efforts to reposition itself for profitable growth have been acknowledged by Benchmark analysts, who reiterated confidence in Lightspeed’s potential for growth and profitability.
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