Lightspeed Commerce Inc (TSX:LSDP, NYSE:LSDP) is prioritizing profitable growth even as macroeconomic conditions drive greater uncertainty for the company, broker Stifel GMP said in a note as it kept its ‘Hold’ rating and $18 price target on the stock.
The point-of-sale (PoS) and e-commerce software provider reported a mixed third-quarter print with in-line revenues and better adjusted underlying earnings, analysts at the US brokerage wrote in a note to clients. However, revised full-year 2023 guidance put implied fourth-quarter expectations below its prior estimates as the company factors in growing headwinds to payments revenue growth from a slowdown in consumer spending, they said.
“Positively, the company reiterated its target for breakeven or better adjusted EBITDA by full-year 2024, as it prioritizes cost discipline to drive profitable growth in the midst of ongoing growth investments in broader go-to-market (GTM) to support its shift in focus to larger, higher value merchants,” the analysts wrote.
READ: Lightspeed Commerce seen as market leader but uncertain macro environment may limit upside according to Stifel analysts
“While valuation appears de-rated with this latest pullback, we continue to see a balanced risk-reward on shares with macro risk not expected to abate in the near-term,” they added.
The analysts said they would look ahead to the upcoming fourth quarter, a seasonally slower period for new guidance to get a better handle on management's near to mid-term outlook.
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