Lightspeed announced new acquisitions on June 7. (Photo: 123RF)
What to do with the titles of Lightspeed, Spin Master, CAE? Here are some recommendations from analysts likely to move prices in the near future. Note: the authors may have a totally different opinion from that expressed.
Lightspeed (LSPY, US $ 87.21): complementary acquisitions
Lightspeed’s Californian shopping, which it announced on June 7, 2021, should really enhance its service offering, unlike its previous acquisitions, said Paul Steep of Scotiabank.
The company, founded in Montreal in 2005, has announced that it will take over the Ecwid e-commerce and vendor-merchant relationship management platforms NuORDER for US $ 925 million (US $ million), divided into 387.5 million. US $ in cash and US $ 537.5 million in stock.
This acquisition suggests that the value of Ecwid and NuORDER is 25 times and 21 times their enterprise value-to-earnings ratio for the previous 12 months, respectively. That’s way more than Lightspeed, which trades at 9 times that ratio.
The dual transaction will allow the point of sale software provider to integrate tools that will really add to their offering, as it does not just serve to break into new markets like other announcements of its kind. done before, observes the analyst.
Paul Steep estimates that Ecwid, for which Lightspeed will spend US $ 500 million, will significantly improve its ability to build transactional websites. The company, which has both offices in San Francisco and Russia, goes beyond the omnichannel experience as we know it, by providing access to social networks and other digital markets. Ecwid, which is measured against competitors like Shopify or Squarespace, serves more than 130,000 customers worldwide, and has generated revenues of over US $ 20 million, with a growth rate of over 50%.
The acquisition of the American company NuORDER – whose revenues have grown by more than 30% in one year to reach US $ 20 million – will serve to accelerate the process of Lightspeed POS in the cross-country link sector by 3 to 5 years. suppliers and shops. This new branch that it presented on February 7, 2021 facilitates the management of the supply chain by giving a better idea of the state of its inventory, and by allowing to consult in real time the catalog of a supplier, recalls Paul Steep. By acquiring NuORDER for US $ 425 million, management comes into contact with 3,000 brands such as Canada Goose and Converse, and 100,000 retailers.
Lightspeed remains a company with multiple organic revenue growth potential, and is on track to consolidate the commerce software market, the analyst believes.
He assures that the state of the financial situation of the company will be solid even after these transactions, which should “amply” allow him to pursue its strategy of merger and acquisition.
Paul Steep believes, however, that Lightspeed should slow down big announcements of the genre in the coming months, in order to focus on integrating its new solutions into its offering.
If these two deals close in the second quarter of fiscal year 2022, or by September 30, 2021, the analyst expects the company to close it with US $ 234 million on hand, or 1.73 million. US $ per share after issuing approximately US $ 700 million in shares with limited voting rights to partially fund its last three acquisitions.
Thus, Scotiabank is revising its target price, from US $ 81 to US $ 83, for the security listed on the New York Stock Exchange, which would represent approximately $ 100 for the security listed in Toronto.
Spin Master (TOY, $ 40.55): a paid movie