- Credit Suisse analyst Timothy Chiodo downgraded Lightspeed Commerce Inc LSPD from Outperform to Neutral and lowered the price target from $21 to $18.
- Given a combination of macroeconomic factors, a still challenging path toward achieving the ~20% non-GAAP EBITDA margin target, ramping efforts from scaled competitors, and a less attractive LTV/CAC demonstrated thus far, the analyst no longer prefers the shares.
- The analyst awaits signs of success in the strategy pivot and abatement of macroeconomic pressures cited by management.
- While the headline location number was disappointing, Lightspeed's performance with more prominent locations was more encouraging but still slower than vs. growth cited last quarter.
- The analyst expects total locations to be challenged, given the combination of churn and lack of gross adds in this segment.
- However, the analyst expects minimal GTV impact given that these locations make up ~5% of total GTV, although Chiodo expects total revenue per unit of GTV to compress the mix toward more prominent merchants slightly.
- Truist Securities analyst Andrew Jeffrey maintained a Buy and raised the price target from $25 to $30.
- Roughly in-line 3Q23 revenue speaks to a challenging retail backdrop and continued elevated small customer churn, partially offset by strong considerable customer growth and ongoing ARPU gains.
- While cross-currents eliminated revenue upside, the management's accurate financial forecasts, focused product development, enhanced sales efforts, and progress on crucial monetization drivers impressed the analyst.
- Jeffrey views Lightspeed as the leading software-enabled POS and payments provider to global complex merchants, given its large-retailer focus and early-stage payments monetization.
- Lightspeed's leverage to normalize global consumer spend is significantly greater than its peers.
- The analyst expected the FinTech industry to consolidate, making Lightspeed a potential acquisition target.
- Price Action: LSPD shares traded lower by 2.39% at $17.13 on the last check Friday.
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