If you are wondering whether Lightspeed Commerce is finally a bargain after years of volatility, you are not alone. This article is going to dig into whether the current price actually stacks up against its fundamentals.
The stock closed at $16.04 recently and, despite a 2.1% gain over the last week, is still down 2.0% over 30 days, 29.2% year to date, 34.5% over 1 year and a hefty 78.8% over 5 years. This naturally raises the question of whether the market has become too pessimistic or not pessimistic enough.
Recent headlines have focused on Lightspeed refining its platform and pushing deeper into unified commerce solutions for retailers and restaurants. These are moves that the market often reads as signs of a maturing, more efficiency minded business. At the same time, ongoing debates about competitive pressure and the path to sustained profitability have kept sentiment mixed, which helps explain why the share price has struggled to hold onto rallies.
On our valuation framework, Lightspeed scores a solid 5 out of 6 for being undervalued across key checks, which suggests there is more going on here than the raw price chart might imply. Next we will walk through the main valuation approaches behind that score, and then finish with a more intuitive way to think about what the stock is really worth.
Find out why Lightspeed Commerce’s -34.5% return over the last year is lagging behind its peers.
A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today. For Lightspeed Commerce, the model used is a 2 Stage Free Cash Flow to Equity approach, starting from last twelve months free cash flow of about $1.73 million.
Analysts forecast free cash flow to rise to roughly $57.80 million by 2028, and Simply Wall St then extrapolates that trajectory further, with longer term projections climbing into the $200 million range by 2034, based on moderating growth rates. All of these figures are discounted back to today using a required return that reflects the risk of the business and its sector.
On this basis, the estimated intrinsic value comes out at about $33.97 per share, compared with a recent market price of $16.04. That implies the stock is trading at roughly a 52.8% discount to the DCF fair value. This suggests investors are pricing in a far weaker future than the model assumes.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Lightspeed Commerce is undervalued by 52.8%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.
Story Continues
LSPD Discounted Cash Flow as at Dec 2025
For companies that are still building towards consistent profitability, the price to sales multiple is often the cleanest way to compare what investors are paying for each dollar of business activity. It reflects both current scale and how much the market believes that revenue can grow into sustainable profits over time.
In general, faster growth and lower risk justify a higher normal multiple, while slower or more uncertain growth calls for a lower one. Lightspeed currently trades on a price to sales ratio of about 1.36x, which is well below the broader Software industry average of roughly 3.84x and also below its peer group average of around 4.49x. On those basic comparisons alone, the stock looks inexpensive relative to similar names.
Simply Wall St goes a step further by estimating a Fair Ratio of 2.69x, a proprietary benchmark for the price to sales multiple that would be reasonable given Lightspeed’s specific mix of growth prospects, profit margins, industry, size and risk profile. Because it is tailored to the company rather than just its sector, this tends to be more informative than simple peer or industry comparisons. With the current 1.36x multiple sitting well below the 2.69x Fair Ratio, the shares screen as attractively priced on this metric.
Result: UNDERVALUED
TSX:LSPD PS Ratio as at Dec 2025
PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, an easy tool on Simply Wall St’s Community page that lets you wrap a clear story around your numbers. You can link your view of a company like Lightspeed Commerce to a specific financial forecast for its future revenue, earnings and margins, and then to a Fair Value estimate that you can compare with today’s share price to decide whether it looks like a buy or a sell. The platform keeps that Narrative up to date as new news, earnings or guidance arrives. This means different investors can express very different perspectives. For example, a more bullish view might assume that Lightspeed can grow revenue at around 11% a year, lift margins toward about 11% and justify a Fair Value near CA$30. A more cautious stance might assume slower growth, thinner margins of roughly 11% and a Fair Value closer to CA$18. Both Narratives can coexist side by side and adjust dynamically as the facts change.
Do you think there’s more to the story for Lightspeed Commerce? Head over to our Community to see what others are saying!
TSX:LSPD Community Fair Values as at Dec 2025
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.
Companies discussed in this article include LSPD.TO.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com