Assessing Lightspeed Commerce (TSX:LSPD) Valuation After Class Action Settlement Ends Legal Overhang

Lightspeed Commerce (TSX:LSPD) just closed a significant chapter after a Quebec court approved an CAD 11 million class action settlement over alleged past financial misstatements, bringing years of legal uncertainty for shareholders to an end.

See our latest analysis for Lightspeed Commerce.

At around CA$16.40, Lightspeed’s 1 day share price return of 1.99% and modest recent gains suggest sentiment is stabilizing. However, the year to date share price return of negative 27.59 percent and five year total shareholder return of negative 81.07 percent show that long term holders are still deep underwater, even if this legal overhang being removed may slowly rebuild confidence.

If this kind of risk reset has you rethinking where growth could come from next, it might be worth exploring high growth tech and AI stocks as potential alternatives in the same broader theme.

With legal risks easing and the share price still trading at a notable discount to analyst targets, the key question now is whether Lightspeed is genuinely undervalued or if the market is already pricing in its future growth.

Most Popular Narrative: 19% Undervalued

With Lightspeed Commerce last closing at CA$16.40 against a narrative fair value near CA$20.26, the gap hinges on ambitious growth and margin assumptions.

Accelerating adoption of digital payments and cloud-based platforms in retail and hospitality core to Lightspeed's growth strategy continues to boost subscription and transaction-based revenue, supporting an expanding total addressable market and steady revenue growth.

Read the complete narrative.

Curious how steady double digit growth, rising payment penetration, and a future earnings multiple come together to support that higher value? See which precise revenue, margin, and valuation assumptions power this narrative and decide if they stack up.

Result: Fair Value of $20.26 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained competition and ongoing cash burn could quickly undermine this undervaluation thesis if revenue growth or margin expansion fail to materialize.

Find out about the key risks to this Lightspeed Commerce narrative.

Build Your Own Lightspeed Commerce Narrative

If you are not fully convinced by this view, or simply prefer hands on research, you can build a custom Lightspeed story in minutes: Do it your way.

A great starting point for your Lightspeed Commerce research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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