Scotia Capital analyst Kevin Krishnaratne is “particularly positive” on Shopify Inc., Docebo Inc. and Lightspeed Commerce Inc. heading into earnings season for Canadian technology companies.
“We see opportunities for top and bottom line beats at both SHOP and LSPD,” he said in a report titled Our Favourite Canadian Tech Ideas Heading Into Q3 Earnings.
“While we are SP-rated on SHOP, largely on valuation (approximately 17.0 times CY25 GP), we think momentum in the stock can continue as we acknowledge SHOP’s ability to drive strong upside on multiple levers in its model. We also note the stock has historically traded higher into BFCM (average move is 7 per cent in the 15 trading days through close on Black Friday from 2016 to 2023). LSPD is trading at a big discount to closest peer TOST (3.0 times CY25 GP vs. TOST 11.0 times), with the company now getting set to turn the corner (increasing profitability, accelerating software growth), which could lead to a rerate. Meanwhile, there remains optionality on the potential of a takeout following its current strategic review (we think a reasonable range is $21 to $25). While we expect in-line revenues at DCBO, we see upside on Adj. EBITDA and FCF given operating leverage in the model and a compelling opportunity with the stock now trading at 4.9x CY25 sales.”