Lightspeed Commerce’s Upcoming Earnings: A Catalyst for a Long-Overdue Re-Rating?

Investors often seek catalysts to unlock hidden value in stocks, and Lightspeed Commerce (LSPD) is on the cusp of one such moment. With its May 22 earnings report looming, LSPD’s shares could finally receive a re-rating—despite its current Zacks Rank #3 (Hold)—as the company’s fundamentals align to justify a Strong Buy designation.

Valuation Discounts: A Rare Opportunity

LSPD trades at a PEG ratio of 0.33, a fraction of its industry’s 2.13, signaling a profound disconnect between its growth potential and market perception. This metric alone suggests the stock is deeply undervalued, especially given its robust earnings trajectory. With a price target of $13.73 (26.78% above current levels), analysts are already pricing in a turnaround.

The company’s $661.57 million cash hoard—enough to cover $4.39 per share—adds a margin of safety. Even as it tackles debt (now at a manageable $19.16 million), LSPD’s liquidity positions it to capitalize on growth opportunities without dilution. This is a stark contrast to peers, many of whom face valuation premiums despite slower growth.

Earnings Growth Potential: A 66.7% Catalyst

The May 22 earnings report is the linchpin. Analysts project a 66.7% year-over-year (YoY) EPS surge, a figure that, if met, would cement LSPD’s status as a high-growth outlier. Recent trends support this optimism: Q1 2025’s EPS of $1.80 already marked a 20% YoY jump, and management has emphasized operational efficiencies—like CEO Elena Torres’ $150 million cost-cutting initiative—as drivers of margin expansion.

Critics may cite LSPD’s trailing-12-month loss of -$0.80, but that figure is dated. The company has since pivoted aggressively, shedding underperforming assets and focusing on high-margin SaaS offerings. The X-900 surveillance recall? It’s now a distant headwind, with new product launches and a renewed focus on government contracts—once lost but now back on track—positioning LSPD for sustained revenue growth.

Analyst Dynamics: A Contrarian Signal

While Zacks assigns a #3 ranking, the analyst community is quietly bullish. Thirteen analysts maintain a “Buy” consensus, with revisions trending upward as LSPD’s execution improves. Institutional investors, too, are hinting at conviction: despite a 4.56% short interest, the stock’s days-to-cover ratio has shrunk to 4.36, suggesting shorts are capitulating.

The Zacks Hold rating, while justified by past struggles, now looks out of step with the company’s forward momentum. LSPD’s 5-year revenue growth forecast of 15.88%—and its clean balance sheet—should push its valuation in line with peers.

Why Act Now?

The May 22 report is the catalyst investors have been waiting for. A 66.7% EPS beat would not only validate LSPD’s turnaround but also force Zacks and others to reassess its ranking. With the stock trading at a 10-year low relative to its PEG ratio, the risk-reward here is asymmetrically skewed toward upside.

Final Call: Buy Before the Re-Rating

LSPD is a contrarian gem. Its valuation discounts, earnings momentum, and analyst optimism create a compelling case for a Strong Buy ahead of the earnings. The Zacks #3 rating is a relic of past issues—ignore it. This is a stock primed to surge once the market catches up to its potential.

Act swiftly: the re-rating could begin in hours.

Disclosure: The author holds no position in LSPD. Analysis reflects public data as of May 13, 2025.