Lightspeed POS Inc. (LSPD) PT Raised to $18 at UBS
UBS analyst Tim Chiodo raised the price target on Lightspeed POS Inc. (NYSE: LSPD) to $18.00 (from $17.00) while maintaining a Neutral rating.
The analyst comments "Lightspeed delivered FQ4 2024 results that were above Street/UBSe across both revenues and Adj. EBITDA. Importantly, GPV as a % of GTV reached 32%, in-line with expectations to reach ~30-35% by FYE, and management reiterated their confidence in being able to achieve payments penetration of 40-45% in FY 2025. In focusing on profitable growth, Lightspeed is repurposing some spend, and expects to end FY 2025 with >100 outbound sales reps. In addition, the company is now expecting that by mid- 2025 (FY) that the reps will return to their traditional roles (with the vast majority of reps having been assigned to onboard new payments customers in FY 2024), highlighting that account managers have historically accounted for ~50% of software bookings in any given period. Further, management noted that the company has an opportunity with pricing and packaging (both with payments and subscription revenues) that they expect to play out throughout FY 2025. Taken together, management is calling for an acceleration in software revenues, with guidance for FQ1 to grow at ~7% (in-line with Q4 growth rates), and exit FY 2025 at 10-15% growth, benefiting from the combination of these initiatives. We continue to view Lightspeed as well-positioned long term as a software platform capable of enabling complex merchants to run their businesses, but also in embedding and powering additional ecosystem- and monetization-enhancing financial services. However, given a more discretionary base, a still challenging path toward achieving the ~20% non-GAAP EBITDA margin target, ramping efforts from scaled competitors (Clover, Square, Toast, and others), and a less attractive LTV/CAC demonstrated thus far (relative to Square, Toast, etc.), we await signs of success in the strategy pivot and/or abatement of macroeconomic pressures."