Lightspeed has ‘alternative all over the place’ going into 2023: analyst

Lightspeed, the Montreal-based point-of-sale software program supplier, has definitely not been proof against the ache…

Lightspeed has ‘alternative all over the place’ going into 2023: analyst
Lightspeed has ‘alternative all over the place’ going into 2023: analyst

Lightspeed, the Montreal-based point-of-sale software program supplier, has definitely not been proof against the ache inflicted on the know-how sector. (Equipped)

Lightspeed Commerce (LSPD.TO) has “alternative all over the place”, a Raymond James analyst says, making it one of many funding agency’s prime know-how corporations that would see worth estimate hikes going into 2023.

The yr 2022 was a brutal one for monetary markets, however notably for know-how companies. The S&P/TSX Capped Info Know-how Index, which incorporates 27 Canadian corporations together with Lightspeed, Shopify (SHOP)(SHOP.TO) and Constellation Software program (CSU.TO), was down 34 per cent in 2022 as of late December. Many know-how corporations noticed valuations plummet, erasing billions in shareholder worth. Tens of hundreds of staff have been laid off by massive tech companies throughout North America.

Lightspeed, the Montreal-based point-of-sale software program supplier, has definitely not been proof against the ache inflicted on the sector. Shares of the corporate have been down roughly 62 per cent in 2022 as of late December, buying and selling round $19 per share. It’s a far cry from the all-time excessive share worth of $158.93 the inventory hit in Sept. 2021, earlier than it was attacked in a scathing brief vendor report.

However Raymond James analyst Steven Li wrote in a analysis observe in late December that there’s “alternative all over the place” in the case of potential upside for Lightspeed in 2023. He has set an “outperform” score on the corporate with a $43 worth goal.

“Lightspeed definitely faces exterior components outdoors its management that would restrict upside revisions,” Li wrote in a observe a part of Raymond James’ listing of Greatest Picks for 2023.

“Nevertheless, on stability, with funds monetization inflecting in current quarters, capital beginning to contribute and software program (common income per person) trying up, we see Lightspeed as one of many higher positioned names by way of potential for constructive estimate revisions.”

Lightspeed chief govt JP Chauvet, who changed founder Dax Dasilva as head of the corporate in February, mentioned in an interview with Yahoo Finance Canada in November that the corporate is concentrated on attaining profitability by means of a multi-pronged plan. The plan consists of consolidating its merchandise beneath one world model, increasing funds adoption, working with established small and medium-sized retailers and “ruthlessly” analyzing spending throughout the firm.

“We should be cautious with each greenback we spend and make sure that we’re getting a return on each greenback,” Chauvet mentioned.

“We’re ruthlessly trying on the group and guaranteeing that each undertaking is not only a ‘good to have’ however an absolute precedence for us.”

The corporate can be bucking tech market developments in the case of hiring. In November, the corporate had 360 open positions and mentioned it deliberate on hiring extra expertise by means of 2023.

“Not like most corporations proper now, we aren’t downsizing. We’re nonetheless a progress story,” Chauvet mentioned.

“That’s one among our challenges. We have to appeal to extra expertise, however I might say it’s simpler than it was a yr in the past, as a result of we’ve got loads of massive tech corporations which are downsizing and slicing jobs. That is going to assist corporations like Lightspeed.”

CIBC Capital Markets analyst Todd Coupland mentioned Lightspeed has “a reputable and cheap path to near-term revenue targets” however famous that the yr might nonetheless be difficult.

“​​Whereas we applaud Lightspeed’s focus, given the slowing macro developments, we count on (gross transaction quantity) progress and buyer additions to be decrease,” Coupland wrote in a observe to shoppers.

Nonetheless, Chauvet has mentioned he sees alternative for Lightspeed, even in a recession, as retailers search efficiencies in an financial downturn.

“We’re very targeted on attracting the fitting retailers that won’t churn, particularly within the context of a possible recession or everyone tightening their belts,” Chauvet mentioned on the time.

“I wish to ensure we’re placing our advertising {dollars} in the direction of attracting the fitting prospects which are going to have the higher returns.”

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Observe her on Twitter @alicjawithaj.

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