Lightspeed Commerce Inc is seen as a leader in cloud point-of-sales (POS) systems although the uncertain macro economic environment may limit near-term upside in the share price.
That was the view of analysts at Stifel GMP, who have initiated coverage of the company with a ‘Hold’ rating and a C$18 price target.
In a note analysts suggested Lightspeed can disrupt a largely legacy sector with a next-gen commerce tech-stack to address the complex needs of merchants in the retail and restaurant industries.
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Recent M&A and a track record of innovation have enabled a “strong competitive moat” in the broker’s opinion, positioning the company for further share gains and greater ARPU expansion with multiple growth drivers.
This should drive adjusted EBITDA to breakeven or better by fiscal year 2024, Stifel forecast.
But while the shares appear de-rated, the backdrop of an uncertain macro and a recent pivot in go to market strategy to higher-value customer cohorts suggests further potential downside risk, while limiting near-term upside, the broker suggested.
The broker said this leads to a more balanced risk/reward, hence the 'Hold' rating.
Contact the author at jeremy@proactiveinvestors.com