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Liveperson (LPSN)
NASDAQ:LPSN
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Liveperson
(NASDAQ:LPSN)
39Underperform
Positive Factors
Customer Wins
Q3 marked another quarter of improvement in customer wins, which totaled 44, up from 37 in 2Q, fueled primarily by existing customers.
Negative Factors
Financial Performance
The FY25 guidance called for adjusted EBITDA losses at the midpoint, contrary to expectations of a positive outcome.
Revenue Decline
The decline in revenue, partly attributed to the founder/CEO's departure, has led to customer contract terminations.
Liveperson (LPSN) vs. S&P 500 (SPY)
Market Cap
$77.22M
Dividend YieldN/A
Average Volume (3M)1.91M
Price to Earnings (P/E)―
Beta (1Y)1.47
Revenue Growth-22.27%
EPS Growth-20.58%
CountryUS
Employees1,095
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)-2.32
Shares Outstanding90,849,240
10 Day Avg. Volume1,634,133
30 Day Avg. Volume1,905,987
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.23
Price to Cash Flow (P/CF)4.00
P/FCF Ratio3.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.95Price Target Upside2.15% Upside
Rating ConsensusHold
Number of Analyst Covering4
Liveperson Business Overview & Revenue Model
Company DescriptionLivePerson, Inc. is a global technology company that operates in the software and IT services sector. It specializes in providing conversational commerce and AI-powered messaging solutions that help businesses engage with their customers across various digital platforms. LivePerson's core products include AI-driven chatbots and messaging platforms that enhance customer service, marketing, and sales processes. The company aims to transform customer engagement through its innovative conversational AI and automation solutions.
How the Company Makes MoneyLivePerson makes money primarily through a subscription-based revenue model, where businesses pay for access to its suite of AI-powered messaging and customer engagement solutions. The company's key revenue streams include recurring subscription fees from its software-as-a-service (SaaS) offerings and additional charges for premium features and services, such as advanced analytics and custom integrations. LivePerson also generates income from professional services, including consulting and implementation support, which help clients optimize their use of the platform. Significant partnerships and collaborations with major enterprises and technology providers further contribute to LivePerson's earnings, as these alliances expand its market reach and enhance its product offerings.
Liveperson Financial Statement Overview
Summary
Liveperson faces considerable financial challenges, with declining revenues, persistent losses, and a distressed balance sheet. While gross profitability remains strong, the inability to translate this into net profit and positive cash flow, coupled with high leverage, underscores the need for strategic financial restructuring to stabilize operations.Income Statement
Liveperson's income statement reflects significant challenges with profitability, as evidenced by negative EBIT, EBITDA, and net income margins in the TTM. Revenue has declined notably by 22.3% from the previous year, indicating a concerning trend in revenue growth. Despite a strong gross profit margin of 65.6% in the TTM, the company struggles to convert this into net profitability due to high operating expenses.40
Negative
Balance Sheet
The balance sheet reveals a precarious financial position, with negative stockholders' equity indicating potential insolvency risks. The debt-to-equity ratio cannot be calculated due to negative equity, and the equity ratio is negative at -11.1%, suggesting the company is over-leveraged. These figures highlight significant financial stability concerns.30
Negative
Cash Flow
Cash flows are under pressure with negative operating and free cash flows in TTM, though free cash flow has slightly improved from the previous year. The operating cash flow to net income ratio is positive, suggesting some efficiency in converting accounting income into cash, but overall cash flow trends remain weak and pose a risk for liquidity.35
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 312.47M | 401.98M | 514.80M | 469.62M | 366.62M | 291.61M | Gross Profit |
| 205.02M | 259.16M | 330.10M | 312.74M | 260.35M | 212.73M | EBIT |
| -160.21M | -111.38M | -201.92M | -89.87M | -60.03M | -84.99M | EBITDA |
| -124.65M | -31.68M | -147.52M | -53.12M | -64.12M | -63.93M | Net Income Common Stockholders |
| -134.27M | -100.44M | -225.75M | -124.97M | -107.59M | -96.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 183.24M | 210.78M | 391.78M | 521.85M | 654.15M | 176.52M | Total Assets |
| 607.78M | 835.51M | 1.09B | 1.19B | 1.01B | 512.71M | Total Debt |
| 52.00K | 591.89M | 740.26M | 580.35M | 551.33M | 198.48M | Net Debt |
| -183.19M | 381.11M | 348.48M | 58.51M | -102.82M | 21.96M | Total Liabilities |
| 675.09M | 787.38M | 1.02B | 837.22M | 754.47M | 364.18M | Stockholders Equity |
| -67.32M | 48.14M | 68.09M | 349.44M | 252.62M | 148.53M |
| Cash Flow | Free Cash Flow | ||||
| -40.27M | -52.43M | -113.27M | -45.07M | -8.04M | -106.74M | Operating Cash Flow |
| -15.13M | -19.77M | -62.10M | 3.25M | 33.60M | -59.16M | Investing Cash Flow |
| -28.22M | -18.84M | -56.86M | -140.25M | -43.48M | -48.51M | Financing Cash Flow |
| 14.97M | -151.14M | 1.62M | 11.84M | 483.84M | 217.85M |
Liveperson Technical Analysis
Negative
0.93
Price Trends
1.26
Negative
1.12
Negative
1.06
Negative
Market Momentum
-0.10
Positive
36.68
Neutral
14.06
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPSN, the sentiment is Negative. The current price of 0.93 is below the 20-day moving average (MA) of 1.09, below the 50-day MA of 1.26, and below the 200-day MA of 1.06, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 36.68 is Neutral, neither overbought nor oversold. The STOCH value of 14.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LPSN.
Liveperson Risk Analysis
Liveperson disclosed 61 risk factors in its most recent earnings report. Liveperson 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
Liveperson Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $9.01B | 20.79 | 12.77% | ― | 15.05% | 31.05% | |
73 Outperform | $22.34B | 23.09 | 11.92% | ― | 3.05% | 55.96% | |
68 Neutral | $15.28B | ― | -1.24% | ― | 7.32% | 88.51% | |
62 Neutral | $2.25B | ― | -2.21% | ― | 14.44% | 84.58% | |
60 Neutral | $2.43B | ― | 16.58% | ― | 8.99% | 63.84% | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% | |
39 Underperform | $77.22M | ― | -137.76% | ― | -22.27% | -20.58% |
* Technology Sector Average
Performance Comparison
LPSN
Liveperson
0.93
-0.11
-10.58%
NICE
NICE
140.59
-100.02
-41.57%
RNG
RingCentral
26.94
-9.39
-25.85%
FIVN
Five9
29.59
-30.42
-50.69%
TWLO
Twilio
102.81
40.51
65.02%
ZM
Zoom Video Communications
73.95
5.51
8.05%
Liveperson Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -15.45% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. While the company exceeded financial expectations in Q4 and reported strong innovation and customer engagement, it faces significant challenges. Revenue is expected to decline, and customer attrition remains a concern. The company's strategic initiatives in AI and partnerships show promise, but financial pressures and the ongoing transition period create uncertainties.Highlights
Exceeding Financial Expectations
Revenue in the fourth quarter of $73.2 million and adjusted EBITDA of $8.1 million were both above the high end of the company's guidance ranges. Revenue for the full year of $312.5 million and adjusted EBITDA of $24.1 million exceeded expectations.
Strong Product Innovation and Adoption
Introduced several new AI-driven features such as Bring Your Own LLM and Copilot Rewrite, which accelerated adoption of generative AI on the platform. Also launched Agent Workspace for Voice, integrating voice and digital channels.
Significant Customer Wins and Expansions
Signed 39 deals in Q4, including 9 new logos and 30 expansions and renewals. Total deal value increased by 18% quarter-over-quarter. New logo deal values more than doubled the average over the first three quarters of 2024.
Positive Trends in AI and Partner Strategy
Q4 saw a 17% sequential increase in the number of customers leveraging generative AI and a 37% increase in conversations using the gen AI suite. Partner strategy aims for a 35% attach rate in 2025, more than doubling current contributions.
Lowlights
Revenue Decline and Customer Attrition
While revenue exceeded expectations, it is expected to decline throughout most of 2025 due to customer cancellations. Net revenue retention was 82% in Q4, with anticipated sequential declines through the year.
Challenging Transition Period
The company is still working through a legacy renewal cycle, impacting attrition levels. Attrition is expected to remain elevated for the first half of 2025.
Financial Pressure and Cost Structure Adjustments
Adjusted EBITDA for 2025 is expected to range from a $14 million loss to breakeven, with no positive free cash flow anticipated for the year. Necessary reductions in the cost structure are ongoing.
Company Guidance
During the LivePerson Fourth Quarter 2024 Earnings Conference Call, the company provided guidance that included several key metrics. For the fourth quarter, revenue was $73.2 million, and adjusted EBITDA was $8.1 million, both exceeding the high end of guidance ranges. The full-year revenue was reported at $312.5 million with an adjusted EBITDA of $24.1 million, again surpassing expectations. Looking ahead to 2025, LivePerson anticipates a revenue range of $240 million to $255 million, with approximately 93% expected to be recurring. First-quarter 2025 revenue is projected to be between $63 million and $65 million, with an adjusted EBITDA loss ranging from $3 million to $1 million. The company emphasized continued demand for AI-driven solutions, expecting to achieve positive net new annual recurring revenue (ARR) in the second half of 2025, despite ongoing attrition challenges in the first half of the year.Liveperson Corporate Events
Executive/Board Changes
LivePerson Board Chair Transition Announced
Neutral
Jan 21, 2025
On January 14, 2025, Bruce Hansen announced his resignation from the Board of Directors of LivePerson, Inc., effective January 31, 2025, due to personal reasons. Following Hansen’s departure, James Miller, a current director, will assume the role of Chair of the Board, maintaining the Board’s size at seven directors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.