Lightspeed anticipates growth and plans $430 million share buyback

MONTREAL - Lightspeed Commerce Inc. (TSX: LSPD) (NYSE: LSPD), a provider of omnichannel commerce platforms trading near its 52-week low of $9.88, has announced its three-year financial outlook, projecting a compound annual growth rate (CAGR) of approximately 20-25% for gross profit in its key markets of retail in North America and hospitality in Europe. According to InvestingPro data, the company has maintained strong revenue growth of 22.05% over the last twelve months, despite challenging market conditions. The company also expects a consolidated gross profit CAGR of around 15-18%, with adjusted EBITDA expected to grow to about 20% of gross profit by Fiscal 2028.

In recent financial developments, Lightspeed completed share repurchases totaling over $130 million and has authorized an additional buyback of up to $300 million, bringing the total authorization to $430 million. This reflects the company’s confidence in its strategic plan and financial strength, supported by a healthy current ratio of 6.1 and minimal debt-to-equity ratio of 0.01, as reported by InvestingPro. The platform’s analysis suggests the stock is currently undervalued, with 8 additional exclusive insights available to subscribers.

The announcement was made in conjunction with Lightspeed’s Capital Markets Day held today at the New York Stock Exchange. CEO Dax Dasilva expressed excitement about Lightspeed’s future, citing the company’s robust product offering, strategic focus on key markets, and positive adjusted EBITDA operations.

Lightspeed’s strategy includes targeted investments in sales, marketing, and product development, along with cost optimization efforts. These initiatives aim to accelerate customer location growth, expand subscription average revenue per user (ARPU), and drive profitable growth over the next three years.

The company also detailed the renewal of its normal course issuer bid (NCIB), approved by the Toronto Stock Exchange, to purchase for cancellation up to 9,013,953 subordinate voting shares over the twelve-month period commencing April 5, 2025. The repurchase program will be conducted through the facilities of the TSX and the NYSE, adhering to their regulations. With analyst targets ranging from $12 to $20.53, investors seeking deeper insights can access comprehensive valuation analysis and the full Pro Research Report through InvestingPro’s extensive coverage of over 1,400 US equities.

Lightspeed’s NCIB endeavors are considered an appropriate investment by the company, as market prices may not always reflect the underlying value of its business. The repurchases are expected to benefit all remaining shareholders by increasing their equity interest when the repurchased shares are canceled.

The information provided is based on a press release statement, and the company reports its financials in US dollars in accordance with International Financial Reporting Standards (IFRS).

In other recent news, Lightspeed Commerce Inc. has revised its financial outlook for the fiscal year ending March 31, 2025, due to a challenging macroeconomic environment. The company now anticipates revenue growth of approximately 18%, down from the previously expected 20%. This adjustment reflects a decrease in transaction-based revenue amid inflation and weakened consumer confidence. Despite these challenges, Lightspeed aims to achieve an adjusted EBITDA of over $53 million for FY25. In a separate development, Lightspeed has appointed Manon Brouillette as Executive Chair of its Board of Directors, effective April 1, 2025. Additionally, the company secured a legal victory as a U.S. court dismissed a securities class action lawsuit against it. Analyst activity has also been notable, with BofA Securities upgrading Lightspeed to a Buy rating with a $20 price target, citing the company’s strategic pivot toward profitability. Meanwhile, Scotiabank revised its price target for Lightspeed to $17, reflecting a lowered valuation due to macroeconomic pressures.

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