Another Significant Upgrade (CIBC)September 19, 2021 Earnings Update
LIGHTSPEED COMMERCE INC.
Raising Price Target On Opportunity Confirmed By Toast IPO
Our Conclusion
Lightspeed peer Toast recently filed its S-1 for an IPO on the NYSE and set its pricing range. Compared to Toast, Lightspeed has superior growth, higher gross margins and has had better business plan execution. This favorable comparison led us to increase our Lightspeed forecast and price target.
Lightspeed is benefiting from Gross Transaction Value (GTV) and customer location growth as well as strong Lightspeed Payments adoption, positioning it for at least 50% of customer locations to adopt Payments over the next few years. As a result, we expect its superior growth will continue.
We retain our Outperformer rating and adjust our price target to C$195 (from C$155). Our target is 30x (prior 25x) our F2023 revenue forecast. Our upside scenario of ~$280 assumes Payments adoption of ~50%.