Signs that LWSA is gaining traction after restructuring its operations, coupled with the assessment that its shares exhibit positive risk-return asymmetry, have encouraged Itaú BBA to invest in the company for 2026.

Analysts Maria Clara Infantozzi, Leonardo Cintra, Stephano Gabriel, and Bárbara Soares upgraded their recommendation for the former Locaweb from neutral to buy and revised the target price for the shares from R$4.90 to R$6.20, which implies a potential upside of 39% compared to the current price.

According to them, LWSA showed a "clearer inflection point in its operational trajectory" compared to June, when they initiated coverage. Since then, the company has been posting strong results in commerce , with revenue growth accelerating from 14% in the first half of the year to 16.6% in the third quarter.

“This indicates that management’s efforts to simplify operations and better monetize its customer base have paid off,” the report says. “Looking ahead, we see more cross-selling and upselling opportunities to support a gradual acceleration of growth in the coming quarters.”

Part of this performance is related to simplifying the portfolio, reversing the previous strategy of multiple M&As to gain scale.

By focusing on the Bling (ERP), Tray (e-commerce platform), and Wake (commerce solutions for medium-sized businesses) brands, customers gain a better understanding of the solutions offered, facilitating communication and sales.

One indication of the results was the 13% increase in average revenue per user (ARPU). "There is room for more growth – currently, cross-selling between Bling and Tray is significantly below potential, with customer overlap of less than 5%," the report says.

The strategy also brought cost relief, with staff reductions and the sale of unprofitable assets, improving margins and cash generation.

Another key point is the reduction in earn-outs that the company had to pay on acquisitions. Without recent new purchases, cash generation improves even further, with an estimated rate of return of 9% for 2026.

“We consider the improvement in free cash flow generation as structural and fundamental to the investment thesis. We project that LWSA will continue to expand margins as the benefits of simplification accumulate and generate operational leverage, while the reduction in earn-outs accelerates free cash flow generation,” the report says.

Operational improvements are occurring at a time of expansion for e-commerce platforms in Brazil. The arrival of TikTok Shop and Temu makes LWSA's proposition of integrated solutions for sellers even more attractive.

Even after the recovery in stocks, with a 72% increase since April and 34% this year, analysts see room for further appreciation.

They highlight that the shares are trading at a PEG Ratio, an indicator that relates price, earnings, and company growth, of 0.9 times, while the average for the technology, media, and telecommunications sector is 1.3 times. Compared to global peers, the share price represents a discount of approximately 58% in its P/E ratio.

"This level seems excessive, and even a modest reduction in the valuation difference could unlock significant upside potential," the report concludes.

At around 12:10 PM, LWSA shares were up 0.22%, at R$ 4.46. The company's market capitalization totals R$ 2.5 billion.