Lightspeed wins dismissal of US securities lawsuit

MONTREAL - Lightspeed Commerce Inc. (NYSE: LSPD) (TSX: LSPD), a provider of a comprehensive commerce platform with a market capitalization of $1.86 billion, has secured a legal victory as the United States District Court for the Eastern District of New York dismissed a securities class action lawsuit against the company and some of its executives. The court found that the claims, which originated from a report by Spruce Point Capital Management in September 2021, were without merit and lacked sufficient legal grounding to proceed. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 6.1.

The lawsuit accused Lightspeed of securities fraud, but the court’s ruling indicated that the plaintiff did not present any actionable claims. Dax Dasilva, Founder and CEO of Lightspeed, welcomed the decision, stating, "This ruling helps us put this matter behind us and stay focused on delivering value for our stakeholders." InvestingPro analysis suggests the stock is currently undervalued, with six analysts recently revising their earnings expectations upward for the upcoming period.

The announcement of the lawsuit’s dismissal comes as Lightspeed prepares for its Capital Markets Day on March 26, 2025, at the New York Stock Exchange. Despite the stock’s 20.29% decline year-to-date, during this event, the company’s management intends to discuss Lightspeed’s transformation plan, operational and financial impact, products, market strategies, and long-term financial projections. Get deeper insights into Lightspeed’s financial health and growth prospects with a comprehensive Pro Research Report, available exclusively on InvestingPro.

Founded in 2005 in Montreal, Canada, Lightspeed provides a one-stop commerce platform that supports merchants in delivering seamless omnichannel experiences. Its cloud-based solution is designed to integrate online and physical operations, streamline multichannel sales, facilitate global payments, and connect businesses to supplier networks. The company has demonstrated strong growth with revenue increasing by 22.05% over the last twelve months to $1.05 billion. Lightspeed serves clients in retail, hospitality, and golf industries across more than 100 countries.

The press release also contained forward-looking statements, including expectations regarding litigation outcomes. These statements are based on the current views of Lightspeed’s management and are subject to risks and uncertainties that could cause actual results to differ materially.

The information for this article is based on a press release statement from Lightspeed Commerce Inc.

In other recent news, Lightspeed Commerce Inc. announced a share repurchase program valued at up to $400 million, reflecting confidence in its future prospects. The company’s latest financial results showed a 17% year-over-year increase in total revenue, reaching $280.1 million, and a positive Adjusted EBITDA of $16.6 million, surpassing the projected $14 million. Meanwhile, BofA Securities upgraded Lightspeed’s stock to a Buy rating with a $20 price target, citing the company’s strategic shift towards profitability and adjusted EBITDA generation. Conversely, Barclays (LON:BARC) downgraded Lightspeed’s stock from Overweight to Equal Weight, adjusting the price target to $18 due to anticipated market challenges in 2025.

Lightspeed’s strategic review concluded with a decision to remain public and focus on growth in North American retail and European hospitality. The company plans to execute $100 million of the share repurchase immediately, with an additional $300 million subject to market conditions. Lightspeed’s management has been successful in improving EBITDA margins, maintaining growth rates at or slightly above 20%, and achieving payments penetration of approximately 37% of Gross Transaction (JO:TCPJ) Value. However, Barclays noted a slowdown in software sales as sales representatives prioritize payment solutions.

Additionally, an RBC analyst highlighted a positive shift in sentiment among American small and medium-sized businesses, which could boost technology investments in areas like Payments and IT Services. Lightspeed, among other companies, is expected to benefit from this trend, with potential gains from increased software sales and targeted price increases. The company is set to hold a Capital Markets Day to provide updates on its transformation plan and its operational and financial impacts.

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