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Lesaka Technologies (LSAK)
NASDAQ:LSAK
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Lesaka Technologies
(NASDAQ:LSAK)
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Rating:50Neutral
Price Target:
$4.50
▲(19.36% Upside)
Action:ReiteratedDate:02/07/26
The score is held back primarily by ongoing net losses and weak/negative free cash flow despite strong revenue growth. Earnings-call guidance and operational momentum (notably EBITDA expansion) improve the outlook, but technicals remain weak and near-term risks (one-offs, Merchant pressure, and upcoming costs/regulatory items) keep the overall rating around the middle of the range.
Positive Factors
Revenue & EBITDA growth
Sustained top-line growth with a large EBITDA increase and reiterated guidance indicates improving unit economics and operating leverage. Over 2–6 months this supports reinvestment capacity, margin expansion potential, and a clearer path to converting scale into consistent operating profitability.
Large, growing consumer base
Rapid consumer growth, higher ARPU and expanding lending originations signal durable customer acquisition and monetization. A >2m active base and accelerated lending create recurring revenue streams and cross‑sell opportunities that underpin sustainable revenue diversification and lifetime value gains.
Proprietary payments & ADP momentum
In‑house switching and strong ADP/Enterprise TPV growth increase margin capture and operational control. Owning critical rails reduces third‑party fees, supports product differentiation for merchants and enterprises, and creates a structural lever for sustainable gross margin improvement.
Negative Factors
Weak cash conversion
Negative free cash flow and volatile operating cash conversion are durable risks to funding and execution. Even with EBITDA gains, inconsistent cash generation can force higher external financing, constrain reinvestment, and magnify execution risk if margins or growth slow.
Merchant segment pressure
Merchant revenue and ARPU declines reflect structural pricing pressure and required hardware/ADP upgrades. Prolonged margin compression in acquiring can erode a historically important revenue stream, limiting overall profitability and increasing reliance on consumer and enterprise segments to sustain growth.
Leverage & negative returns
Moderate but rising leverage combined with deeply negative ROE indicates the capital base isn't earning returns. This structural imbalance raises refinancing and flexibility risks if profitability and cash flow fail to improve, potentially forcing tougher cost cuts or equity capital raises.
Lesaka Technologies (LSAK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$377.64M
Dividend YieldN/A
Average Volume (3M)37.91K
Price to Earnings (P/E)―
Beta (1Y)0.29
Revenue Growth16.48%
EPS Growth-326.01%
CountryUS
Employees2,531
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.08
Shares Outstanding83,920,680
10 Day Avg. Volume25,302
30 Day Avg. Volume37,908
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)1.35
Price to Sales (P/S)0.52
P/FCF Ratio-13.09
Enterprise Value/Market Cap1.54
Enterprise Value/Revenue0.78
Enterprise Value/Gross Profit3.08
Enterprise Value/Ebitda268.11
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Lesaka Technologies Business Overview & Revenue Model
Company DescriptionLesaka Technologies (LSAK) is a technology company focused on the financial services sector, primarily in South Africa and the broader African market. The company specializes in providing innovative payment solutions, digital banking services, and value-added financial technology services that cater to both consumers and businesses. Lesaka aims to enhance financial inclusion by leveraging technology to streamline transactions, improve customer experiences, and offer a range of services including payment processing, mobile wallets, and point-of-sale solutions.
How the Company Makes MoneyLesaka Technologies generates revenue through multiple avenues, primarily by charging transaction fees for its payment processing services and commissions from its digital banking solutions. The company also earns income from merchant services, where it provides businesses with point-of-sale systems and payment infrastructure. Additionally, Lesaka may benefit from subscription fees for its value-added services, as well as partnerships with financial institutions and retailers that expand its service offerings. Strategic alliances and collaborations with other technology providers further enhance its capabilities and market reach, contributing to its overall revenue growth.
Lesaka Technologies Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial picture driven by robust group revenue growth (16% YoY), a significant 47% increase in adjusted EBITDA, and outsized Consumer and Enterprise momentum (Consumer revenue +38%, active consumers +21%, lending originations +88%, Enterprise revenue +67%). Strategic milestones — Competition Tribunal approval for Bank Zero and the One Lesaka consolidation — position the company for improved funding, margin capture and a unified go‑to‑market. Offsetting these positives are near‑term challenges within Merchant (revenue down 2%, ARPU down 10%, Merchant EBITDA down 6%) due to transformation, pricing pressure, and hardware upgrade investments, plus the presence of non‑recurring gains (ZAR 50m and ZAR 65m) that partly boosted the quarter. Management provided constructive guidance and reiterated full‑year ranges while noting rebrand marketing costs (ZAR 50–75m) and the need for Prudential Authority approval for Bank Zero. On balance, the company shows improving fundamentals and scalable platform dynamics, with manageable short‑term headwinds in Merchant and some one‑offs that temper the headline results.Q2-2026 Updates
Positive Updates
Net Revenue Growth
Group net revenue of ZAR 1.6 billion in Q2, up 16% year‑on‑year and within guidance.
Strong EBITDA Expansion
Group adjusted EBITDA of ZAR 304 million, a 47% year‑on‑year increase and slightly above the midpoint of guidance.
Material EPS and Adjusted Earnings Improvement
Adjusted earnings of ZAR 111 million for the quarter (adjusted EPS increased from ZAR 0.21 to ZAR 1.34), representing more than a sixfold increase year‑on‑year.
Consumer Division Outperformance
Consumer net revenue ZAR 567 million, up 38% year‑on‑year; active consumer base >2.0 million (+21% YoY); ARPU up 15% to ZAR 91/month; segment adjusted EBITDA more than doubled to ZAR 159 million.
Lending Momentum in Consumer
Record consumer lending originations ≈ ZAR 1.2 billion (+88% YoY) and outstanding loan book ≈ ZAR 1.5 billion (+106% YoY); 40% of originations were the new 9‑month product.
Enterprise Revenue and Platform Progress
Enterprise net revenue ZAR 217 million, up 67% YoY; ADP total payment volume ZAR 11.9 billion (+18% YoY); proprietary payment switch processed >40% of card TPV in‑house this quarter, improving capture of margin and control.
ADP and Supplier Payment Growth
ADP TPV grew 27% YoY for ADP-specific TPV; supplier payments within ADP increased 48% YoY and supplier base exceeds 1,900.
Strategic Milestones – Bank Zero Approval & One Lesaka
Received Competition Tribunal approval for the Bank Zero combination (expected to deliver meaningful funding/balance sheet benefits) and commenced consolidation of operating brands under the One Lesaka strategy.
Operating Efficiency Trends
Operating margin improved from ~15% a year ago to 19% this quarter; LTM CapEx as % of EBITDA declined from ~46% to 33%; group costs reduced to ZAR 50 million for the quarter.
Cash Generation and Investment
Cash flow from operations ZAR 419 million for the quarter; CapEx ZAR 84 million (ZAR 48 million invested in growth initiatives including Smart Safe and software capitalization).
Negative Updates
Merchant Revenue and ARPU Pressure
Merchant net revenue pulled back 2% year‑on‑year; merchant ARPU declined 10% to ZAR 1,835, driven by lower airtime volumes and margin compression in ADP and acquiring.
Merchant Profitability Impact from Transformation
Merchant segment adjusted EBITDA declined 6% to ZAR 170 million as the division undergoes a transformation, with management expecting Merchant growth to be flat for the rest of the fiscal year and recovery in FY27.
Market Pricing and Margin Compression
Ongoing pricing pressure in the merchant market and margin compression in ADP and acquiring are weighing on near‑term merchant economics.
One‑off Items Inflating Q2 Results
Q2 benefited from non‑recurring items: Cell C stake exit (ZAR 50 million) and release of a ZAR 65 million CPS accrual; these once‑offs boost results but are not recurring operational performance.
Pending Regulatory Approval
Bank Zero transaction still requires Prudential Authority approval; timing and final terms could affect the anticipated balance sheet and funding benefits.
Rebrand and Marketing Costs to Impact EBITDA
Expected One Lesaka marketing/rebrand costs estimated at ZAR 50–75 million over the next two quarters, which are excluded from adjusted EBITDA guidance and will pressure reported near‑term profitability if incurred.
Company Guidance
Management guided Q3 net revenue of ZAR 1.65–1.80 billion (midpoint ~ZAR 1.725b, ~27% y/y) and group adjusted EBITDA of ZAR 300–340 million (midpoint ~ZAR 320m, ~37% y/y). For the full year they reaffirmed net revenue of ZAR 6.4–6.9 billion and group adjusted EBITDA of ZAR 1.25–1.45 billion (implying ~21–30% revenue growth and ~36–57% EBITDA growth), with guidance excluding any Bank Zero impact; group adjusted EBITDA guidance includes office‑move costs but excludes potential one‑off rebranding/marketing spend (estimated ZAR 50–75m over the next two quarters). Management also reiterated expectations that leverage (currently 2.5x) will trend lower toward a medium‑term target of ≤2x, CapEx will be below ZAR 400m p.a., and Enterprise is targeted to run at roughly ZAR 40–50m EBITDA per quarter in the near term.Lesaka Technologies Financial Statement Overview
Summary
Strong TTM revenue growth and improving gross margin are positives, but the company still shows a TTM net loss (about -6.9% net margin) and weak cash conversion with negative free cash flow. Balance sheet leverage is moderate but rising and ROE is meaningfully negative, keeping execution and funding-risk elevated until profitability and FCF stabilize.Income Statement
Revenue growth is strong, with 34% in TTM (Trailing-Twelve-Months) and a clear multi-year step-up in scale versus earlier years. Gross margin has improved versus 2023–2024 levels, supporting better underlying unit economics. However, profitability remains the key issue: TTM (Trailing-Twelve-Months) shows negative operating profit and a net loss (about -6.9% net margin), and while EBITDA has improved to slightly positive, it is still near breakeven—leaving earnings highly sensitive to costs and execution.45
Neutral
Balance Sheet
Leverage is moderate with debt at roughly 1.0x equity in TTM (Trailing-Twelve-Months), and equity remains positive. That said, returns on equity are meaningfully negative (TTM (Trailing-Twelve-Months) ROE around -19%), reflecting that the capital base is not currently generating profits. Debt levels have also risen from 2024, reducing financial flexibility if profitability does not improve.54
Neutral
Cash Flow
Cash generation is weak and volatile. TTM (Trailing-Twelve-Months) operating cash flow is only slightly positive while free cash flow is negative, and free cash flow has deteriorated versus the prior annual period. Earlier years show swings between positive and deeply negative operating cash flow, highlighting inconsistency in converting reported results into sustainable cash generation.38
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 743.30M | 659.70M | 564.22M | 527.97M | 222.61M | 130.79M |
| Gross Profit | 188.46M | 173.16M | 121.55M | 110.43M | 54.29M | 34.54M |
| EBITDA | 2.16M | -50.77M | 29.80M | 15.38M | -20.70M | -49.52M |
| Net Income | -51.60M | -87.50M | -17.44M | -35.07M | -43.88M | -38.06M |
Balance Sheet | ||||||
| Total Assets | 704.64M | 653.71M | 558.45M | 542.23M | 656.57M | 428.33M |
| Cash, Cash Equivalents and Short-Term Investments | 69.60M | 76.52M | 59.06M | 35.50M | 43.94M | 198.57M |
| Total Debt | 258.79M | 235.37M | 166.70M | 170.05M | 215.19M | 18.96M |
| Total Liabilities | 427.99M | 392.33M | 303.16M | 283.33M | 342.22M | 67.37M |
| Stockholders Equity | 269.52M | 254.54M | 255.29M | 258.91M | 314.35M | 360.96M |
Cash Flow | ||||||
| Free Cash Flow | -14.56M | -26.32M | 15.83M | -16.16M | -41.76M | -62.66M |
| Operating Cash Flow | 2.19M | -9.12M | 28.79M | 410.00K | -37.20M | -58.37M |
| Investing Cash Flow | -6.30M | -11.34M | -16.41M | -16.46M | -193.69M | 47.77M |
| Financing Cash Flow | 4.62M | 29.73M | -7.11M | -19.12M | 122.26M | -13.08M |
Lesaka Technologies Technical Analysis
Positive
3.77
Price Trends
4.55
Negative
4.32
Positive
4.36
Positive
Market Momentum
-0.02
Positive
49.20
Neutral
60.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LSAK, the sentiment is Positive. The current price of 3.77 is below the 20-day moving average (MA) of 4.53, below the 50-day MA of 4.55, and below the 200-day MA of 4.36, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 49.20 is Neutral, neither overbought nor oversold. The STOCH value of 60.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LSAK.
Lesaka Technologies Risk Analysis
Lesaka Technologies disclosed 101 risk factors in its most recent earnings report. Lesaka Technologies reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lesaka Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $468.96M | 12.36 | 26.84% | ― | -6.57% | -29.62% | |
67 Neutral | $1.79B | 26.52 | 9.79% | ― | 10.58% | -45.52% | |
63 Neutral | $181.09M | 25.02 | 20.36% | ― | 32.61% | -8.26% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $2.18B | -60.93 | -9.95% | ― | 11.05% | 45.23% | |
53 Neutral | $260.19M | -1.99 | -48.63% | ― | 101.97% | 58.61% | |
50 Neutral | $377.64M | -7.21 | -32.28% | ― | 16.48% | -326.01% |
* Technology Sector Average
LSAK
Lesaka Technologies
4.65
-0.20
-4.12%
IMXI
International Money Express
15.75
0.49
3.21%
TENB
Tenable Holdings
19.00
-19.06
-50.08%
PAYS
PaySign
3.39
0.63
22.83%
PAYO
Payoneer
5.24
-4.94
-48.53%
BKKT
Bakkt Holdings, Inc. Class A
10.88
-1.06
-8.88%
Lesaka Technologies Corporate Events
Executive/Board ChangesShareholder Meetings
Lesaka Technologies Holds Annual Shareholder Meeting
Neutral
Dec 8, 2025
Lesaka Technologies recently held its Annual Meeting where shareholders voted on several key proposals. All director nominees were elected, KPMG, Inc. was ratified as the independent registered public accounting firm for the fiscal year ending June 30, 2026, executive compensation was approved on an advisory basis, and an amendment to increase the number of shares authorized for issuance by 3,000,000 was passed.
The most recent analyst rating on (LSAK) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Lesaka Technologies stock, see the LSAK Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.