Lightspeed Commerce Inc. (NYSE: LSPD) looked like it was all set to be merger bait. Then, along with its earnings report, came a dreaded phrase within its strategic review — “… unanimously determined that executing a full transformation plan as a public company presents the best available path to maximizing value…”

This usually implies “no one wants to buy us (at least at what we think we are worth).” The day its news dropped was Feb. 6, and the shares fell to $12.60 from $14.50 on about 6-times normal volume. But…

All might not be lost here for long-term investors. The stock was back up to $13.70 within just two weeks. And BofA analyst Koji Ikeda now believes there is an incredible buying opportunity here. BofA moved Lightspeed Commerce shares to Buy from “No Rating” and set a $20 price objective on this stock. That’s implied upside of about 46% if BofA’s outlook comes to fruition. Here’s why…

According to the report, the stock’s sell-off after the conclusion of its strategic review made Lightspeed’s shares into a risk/reward opportunity that was just too attractive to ignore.

Lightspeed’s digital commerce platform operation is moving toward profitable growth from positive EBITDA. The firm’s revenue growth with 17% year-over-year (to $280.1 million) and its subscription revenue (recurring) was up 9% year-over-year.

One issue in trying to find a buyer is that Lightspeed’s profit metrics may be too low to be open to all interested buyers from operating companies to private equity. The net loss improved to -$26.6 million, while its adjusted EBITDA of $16.6 million exceeded the company’s own outlook of approximately $14 million.

Lightspeed’s board of directors also authorized share repurchase to return up to $400 million to shareholders. This may not sound like much compared to multi-billion buybacks that investors chase. But — it’s about 20% of the current value!

BofA sees the focus of two attractive and strategic verticals — North American retail and EMEA hospitality. The firm also sees the March 26 investor day as a potential catalyst. BofA’s investor rationale says:

We believe that Lightspeed has long-term potential to disrupt and take share within its target end-market verticals (North American Retail and EMEA hospitality) and grow average revenue per user (ARPU) among the customer base. We see upside in its focus on profitable growth and believe the story is moving to its potential to generate healthy adjusted EBITDA, which we believe is underappreciated.

The report also rationalized its revenue growth to 12.7% ahead, moving implied 2026 sales down to $1.23 billion from $1.32 billion but raising expectations to $1.36 billion for 2027. EBITDA margins are also expected to rise to 7.9% in 2027 from 6.2% in 2026, both are higher than prior estimates.

Lightspeed’s market cap at the current $13.65 share price is right at $2.1 billion. Whether customers and would-be acquirers care that the company is based in Canada is up to each investor to decide. That $20 price objective compares to a 52-week range of $11.01 to $18.96. This had reached a zenith of over $100 in 2021 during the ecommerce boom.

The opinions and ratings of this report are from BofA Securities. Tactical Bulls has no formal rating and no price target of its own Lightspeed Commerce Inc.