LivePerson, Inc.: Market-Trumping Tech Stock Up 74% in 2019 & Has Lots of Room to Run

LivePerson, Inc. Up 72% in 2019 But Looks More Bullish in Q3, Q4
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LPSN Stock Bullish on Strong Outlook

LivePerson, Inc. (NASDAQ:LPSN) continues to have a stellar year. LPSN stock has soared 174% since the start of 2018 and has advanced 72.5% in 2019. By comparison, the S&P 500 is up 20.3% in 2019, while the Nasdaq has advanced a respectable 25.3%.

Even though LivePerson has returned strong double-digit gains for investors in 2019, the New York City-based company still has lots of room to grow this year and next.

The company reported record first-quarter revenue and strong year-over-year growth, as well as providing strong guidance.

When we last looked at LivePerson back in February, we had a 2019 stock price forecast of $38.00, which was 35% of the stock’s then-price of $28.00. That was considered aggressive at the time when compared to what Wall Street analysts were predicting.

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In light of strong first-quarter results and a bullish outlook, a new 2019 forecast of $42.00 seems more appropriate. That suggests additional upside potential of 29% from LPSN stock’s current price of $32.52.

LPSN Overview 

LivePerson, Inc. is a provider of an artificial intelligence (AI)-powered messaging platform. The company provides real-time messaging platforms (live and AI-powered bots) for web sites and social media networks for mobile devices and desktop. (Source: “About,” LivePerson, Inc., last accessed July 18, 2019.)

LivePerson has over 18,000 customers, including Adobe Inc (NASDAQ:ADBE), Citigroup Inc (NYSE:C), IBM (NYSE:IBM), L’Oréal SA, and Home Depot Inc (NYSE:HD).

LPSN Stock Information

Market Cap $2.1 Billion
52-Week Change 36.96%
52-Week High $32.41
52-Week Low $16.98
Shares Outstanding: 64.8 Million
Float 60.0 Million
50-Day Moving Average: $28.26
200-Day Moving Average: $26.93

(Source: “LivePerson, Inc. (LPSN),” Yahoo! Finance, last accessed July 18, 2019.)

LivePerson, Inc. has had a great 2019, advancing roughly 72%. After trading in a tight range between March and June, the company’s share price broke out to the upside in July. On July 15, LivePerson stock broke above a resistance level near $31.00 and hit a new 52-week high of $32.41 on July 16.

LivePerson will be releasing its second-quarter financial results after the markets close on July 31.


Chart courtesy of StockCharts.com

Record First-Quarter Revenue

On May 2, LivePerson, Inc. announced that its revenue for the first quarter, ended March 31, 2019, increased 14% year-over-year to a record $66.4 million. Business operations revenue was also up 14% year-over-year at $61.0 million, while consumer operations revenue advanced 16% to $5.4 million. (Source: “LivePerson Announces First Quarter 2019 Financial Results,” LivePerson, Inc., May 2, 2019)

LivePerson reported a first-quarter net loss of $18.9 million, or $0.31 per share, versus a loss of $3.2 million, or $0.06 per share, in the same period last year.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter was a loss of $3.2 million, or $0.05 per share, compared to income of $4.1 million, or $0.07 per share, in the same prior-year period.

Cash and cash equivalents at the end of the first quarter increased to $238.0 million.

During the first quarter, LivePerson inked 118 deals, a 20% increase from the first quarter of 2018. This number includes 66 new customer wins.

New customer wins came from some of the world’s largest airline, cable, financial services, telecom, and technology companies. LivePerson also expanded its business relationship with a Fortune 500 financial institution, global personal care company, and three of the top telecoms in Europe and Asia.

LivePerson reaffirmed its 2019 guidance for revenue and adjusted EBITDA. Revenue is projected to be in a range of $284.5 to $291.5 million, representing year-over-year growth of 14% to 17%. Fourth-quarter revenue is forecast to be in the high-teens-to-20% growth range.

For 2020, LivePerson is targeting annual revenue growth of at least 20%.

Full-year adjusted EBITDA is expected to be in a range of $10.0 to $15.0 million, or a four-to-five-percent margin.

Analyst Take

LivePerson, Inc. continues to be a great tech company that rewards buy-and-hold investors. The company reported record results for 2018 and that momentum has carried into 2019, with record first-quarter revenue and a strong outlook for 2019 and 2020.

The company has a strong cash position, it recently expanded its sales team, it accelerated its product development, and it launched new products. All of which should help juice LPSN stock in the second half of 2019 and in 2020.