LivePerson, Inc.: Excellent Momentum and Strong Guidance for 2019 & 2020

LivePerson, Inc. Stock
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LivePerson Stock Forecast for 2019

A rising tide lifts all boats. That same momentum has been helping boost the tech sector, which is why it’s important to look for tech stocks reporting strong results and outlooks for 2019 and 2020.

Eventually, the optimism on Wall Street will diminish and, along with it, any overvalued, high-flying technology stocks that have been just along for the ride.

LivePerson, Inc. (NASDAQ:LPSN) is a great tech stock helping fuel the broader industry optimism. The company continues to report strong financials and provides an encouraging outlook, both of which are essential for continued stock growth. And that is what LivePerson stock has been doing. Over the past year, the company’s share price has advanced 100%.

Despite its eyewatering stock gains, LivePerson has the potential for even more huge gains this year. A 2019 stock forecast of $38.00 is certainly within reach. That forecast represents an approximately 35% short-term gain over the company’s stock price of about $28.00 at the time of this writing.

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LivePerson, Inc. Overview

New York City-based LivePerson provides real-time messaging platforms for web sites and social media networks, for both mobile devices and personal computers. Those messaging platforms feature live agents and artificial intelligence-powered chatbots.

LivePerson’s high-tech products are a lifesaver in the customer service departments of the company’s 18,000 customers, which include Adobe Inc (NASDAQ:ADBE), Citigroup Inc (NYSE:C), IBM (NYSE:IBM), L’Oréal SA (OTCMKTS:LRLCY, EPA:OR), Orange SA (NYSE:ORAN), PNC Financial Services Group Inc (NYSE:PNC), and Home Depot Inc (NYSE:HD). (Source: “About us,” LivePerson, Inc., last accessed February 28, 2019.)

LivePerson Stock Information
Market Cap $1.8 billion
Beta 0.69
52-Week Change 97.8%
52-Week High $28.70
52-Week Low $14.20
Shares Outstanding 63.4 million
Float 59.1 million
50-Day Moving Average $23.59
200-Day Moving Average $22.60

(Source: “LivePerson, Inc. (LPSN),” Yahoo! Finance, last accessed February 28, 2019.)

LivePerson’s share price had been on a meteoric tear since the start of 2018. That is, until October, when the entire stock market experienced a sell-off (and then again in December, when the markets witnessed a further meltdown). Still, LivePerson stock ended the year up 62.5%. Meanwhile, the Nasdaq ended 2018 4.3% in the red.

Since the start of 2019, LivePerson’s share price has returned to its bullish ways, erasing all of its fourth-quarter 2018 losses. The stock is now up about 51% year-to-date.


Chart courtesy of StockCharts.com

For technical trades, LivePerson is about to hit an important inflection point, with the company’s 50-day moving average about to cross over the 200-day moving average.

That is a bullish indicator called a golden crossover. It typically points to additional moves to the upside. The last two times LivePerson’s stock chart signaled a golden crossover, the company’s share price moved significantly higher.

LivePerson, Inc. Reports Record Results for 2018

On February 21, LivePerson announced its financial results for the quarter and the full year ended December 31, 2018.

Fourth-quarter revenue came in at $65.7 million, a 15% increase over the $57.4 million recorded in the same prior-year period. This continues the company’s recent trend of reporting strong double-digit revenue growth. In the first three quarters of 2018, revenue increased by 14%. (Source: “LivePerson Announces Fourth Quarter 2018 Financial Results,” LivePerson, Inc., February 21, 2019.)

The company reported a fourth-quarter net loss of $6.5 million, or $0.11 per share, compared to a loss of $3.7 million, or $0.06 per share, in the fourth quarter of 2017.

LivePerson’s adjusted operating income was $1.4 million, compared to just $0.6 million in the fourth quarter of 2017.

During the fourth quarter, LivePerson signed new contracts with Delta Air Lines, Inc. (NYSE:DAL) and Aramark (NYSE:ARMK), as well as with a top-three bank in Japan, a top-five global apparel retailer, and a leading Italian telecommunications company.

LivePerson also expanded its business with one of the largest international cable companies, a global technology and consulting firm, a multi-billion-dollar global computer software company, two leading utility companies, and a national online mortgage lending company.

Full-year revenue of $249.8 million represented a 14% increase over the $218.8 million recorded in 2017. The company reported a full-year net loss of $25.0 million, or $0.42 per share, compared to a loss of $18.1 million, or $0.32 per share, in 2017.

LivePerson ended the year with a cash balance of $66.4 million, compared with $56.1 million on December 31, 2017.

Looking ahead to the rest of 2019, CFO Chris Greiner said the company is doubling the size of its sales team. He believes that this move will result in revenue growth of up to 20% by the fourth quarter of 2019 and growth of at least 20% in 2020. (Source: Ibid.)

For the first quarter of 2019, LivePerson provided the following guidance:

  • Revenue in the range of $65.75 to $66.75 million
  • Generally accepted accounting principles (GAAP) net loss per share of $0.35 to $0.31
  • Adjusted operating income loss of $8.4 to $6.4 million
  • Diluted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) per share of $0.07 to $0.04

For full-year 2019, LivePerson provided guidance of:

  • Revenue in the range of $284.5 to $291.5 million
  • GAAP net loss per share of $0.92 to $0.83
  • Adjusted operating income loss of $7.6 to $2.6 million
  • Diluted adjusted EBITDA per share of $0.15 to $0.23

(Source: Ibid.)

Analyst Take

LivePerson is clearly delivering the kind of results that investors like to see. While the company’s fourth-quarter net loss widened, it was largely due to one-time charges. That said, it expects the losses to continue in 2019.

What investors are focused on now is the company’s top-line double-digit revenue growth and a strong outlook for both 2019 and 2020.

In the first quarter of 2019, revenue is projected to climb between 13% and 15% while full-year revenue is expected to increase by 14% to 17%. This comes as LivePerson continues to land new large customers and expand its current business.

LivePerson, Inc. has a strong cash position, reports strong revenue growth, is doubling its sales team, and is providing a robust outlook for 2019 and 2020. Minus the profitability, it has everything that investors like to see in a company. And that should help the LivePerson stock price trend steadily higher this year and next.