Shares of Lightspeed (LSPD) plunged after the payment-processing software company decided to remain publicly traded and explore small acquisitions. This decision comes after a months-long strategic review, which considered taking the company private. However, the board of directors ultimately determined that staying public was the best path forward.
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Lightspeed plans to focus on expanding its retail operations in North America and hospitality business in Europe. The company also announced plans to buy back up to $400 million of its stock, with $100 million of that total to be purchased immediately. In addition, Lightspeed will look at ways to integrate artificial intelligence, as well as improve inventory management and free up capital to invest in growth areas.
The company’s decision was met with a mixed reaction as some analysts are concerned about Lightspeed’s ability to execute its growth plan in what is a very competitive market. In fact, five-star National Bank of Canada analyst Richard Tse cut Lightspeed’s share price target by $5 to $15 due to the company’s narrowed total available market.
Is Lightspeed Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LSPD stock based on five Buys, nine Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 39% decline in its share price over the past year, the average LSPD price target of $19.19 per share implies 60.8% upside potential.
