TSX:LSPD - Post Discussion
Post by
retiredcf on Aug 23, 2023 10:22am
RBC
Current and upside scenario targets are US$21.00 and US$27.00. GLTA
August 22, 2023
Lightspeed Commerce Inc. Fine-tuning the model
Our view: We are fine-tuning our earnings model after reviewing various KPI assumptions and profitability levels for FY24 and initiating FY25 estimates.
Key points:
Adjusting the model. We are adjusting our revenue/adj. EBITDA for FY24 to $890M/$0.1M from $891M/$0.0M. In addition, we are initiating FY25 revenue/adj. EBITDA estimates $1.1B/$38.9M. Underlying these estimates are 1) payments penetration of 30% for FY24 and 35% for FY25, 2) gross profit margins of 41.6% for FY24 and 39.0% for FY25, and 3) transaction- based revenue growth of ~35% y/y for FY24 and ~38% y/y for FY25.
Current thoughts. The Unified Payments strategy remains debated, with the Bulls pointing to recent quarter trends, with GPV % penetration into GTV of ~22%, up ~300bps sequentially and management sticking to its 30%-35% by year-end FY24; while the Bears suggest that customer churn could accelerate, gross margins will remain under pressure as payments increase as a percentage and LSPD Capital is required to offset degradation (~90% gross margins), but puts more risk on the balance sheet near-term. We believe both points are accurate but would note that if the Unified Payments strategy is successful and able to achieve 50% penetration by FY25, then there could be more upside to our adj. EBITDA estimate for FY25.
Be the first to comment on this post