02:37 PM EDT, 04/03/2024 (MT Newswires) -- Lightspeed announced a restructuring whereby it plans to reduce its headcount by ~280 employees (~10% of the workforce) along with several other cost reduction initiatives across facilities and operations. National Bank estimates this will result in approximately $30-$40 million in annualized cost savings. It is expected that some of those savings will be reinvested toward driving growth. The restructuring plan is expected to be completed in the first quarter of fiscal 2025 (Jun) with the majority of the related costs to be incurred in that time period as well.

The company has reaffirmed its previously established revenue and Adj. EBITDA outlooks for F24 which calls for ~26% Y/Y revenue growth and breakeven or better Adj. EBITDA.

Lightspeed also announced that it had received both Board and regulatory approval to initiate an NCIB and automatic share purchase plan (ASPP) to allow for the repurchase of up to 9.72 million subordinate voting shares (valued at ~$140 million), representing ~10% of the public float as of March 22, 2024. "In our view, this is a prudent allocation of capital given ~$750 million in cash, no debt and modest valuation of 1.2x EV/Sales on our F25 numbers," analyst Richard Tse writes.

"Bottom line, we believe the above moves are positive from a capital allocation standpoint. With investor appetites having shifted to more balanced (profitable) growth, we think this move should alleviate concerns that the company was reverting to aggressive investment and potentially resuming its former acquisition path."

Maintain Sector Perform rating and US$20 price target.

Price: 19.81, Change: +0.95, Percent Change: +5.04