Perceptual Speed Index is a page load performance metric that shows you how quickly the contents of a page are visibly populated. The lower the score, the better.
To lower your Speed Index score, you need to optimize your page to visually load faster. Two good starting places are:
Lighthouse uses a node module called Speedline to generate the Speed Index score.
For more information on the algorithms and methodologies behind Speed Index, see Speed Index.
The target score is computed by a cumulative distribution function of a log-normal distribution. Check out the comments in the source of the audit if you need to know more.