Sometimes, impressing investors can be difficult. Usually, the draw of profitability will do, but sometimes, even that isn’t enough. The rule, however, was amply proven today as point-of-sale system vendor Lightspeed (TSE:LSPD) (NYSE:LSPD) shot up over 5% in Wednesday morning’s trading thanks to its current plan to become profitable once more.
The first major step in the plan is one of the most tried-and-true approaches but also one of the most tragic. Lightspeed plans to eliminate 280 jobs from its roster, about 10% of its total employee count. That, in turn, will free up cash for investments in other areas, including a stock buyback plan of up to 10% of its “total public float.”
The cuts and the rest of the restructuring plan should be in play by the end of Fiscal Year 2025’s first quarter. With the latest financials for Lightspeed boasting a crippling set of losses—the third quarter of 2024 featured a $40.2 million net loss, while the full year offered a loss of $814.8 million—it was clear something needed to be done.
A Light at the End of the Tunnel
These are drastic measures, certainly, but it’s safe to call these drastic times. However, things are looking up a bit for Lightspeed. They just landed a slot on TechRadar’s “Best POS System for Food Trucks” list, which should help offer up visibility and give Lightspeed some fresh contact in its target market. However, that same market is likely looking to be hard hit by the same conditions hitting Lightspeed itself.
Others, meanwhile, are expecting Lightspeed to produce an earnings surprise in its next quarterly report. In fact, favorable revisions for earnings estimates have already emerged, which could be good news for the next quarter.
Is Lightspeed a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LSPD stock based on eight Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 0.1% loss in its share price over the past year, the average LSPD price target of C$27 per share implies 35.54% upside potential.
