Why LivePerson Stock Is Surging Today

MarketsMotley Fool

What happened

Shares of cloud-based enterprise messaging specialist LivePerson (NASDAQ: LPSN) jumped on Wednesday following the release of the company's mixed fourth-quarter report. Revenue was higher than expected, but the bottom line fell slightly short of analyst estimates. Solid guidance for 2018 may be the reason the stock is climbing, with the company targeting double-digit revenue growth this year. As of 12:50 p.m. EST, shares of LivePerson were up about 10%.

Continue Reading Below

So what

LivePerson reported fourth-quarter revenue of $57.4 million, up 2.3% year over year and about $0.9 million higher than the average analyst estimate. Business operations generated $52.9 million of revenue, while consumer operations produced $4.5 million of revenue.

LivePerson signed 101 deals during the fourth quarter, adding 41 new customer contracts. This included a Fortune 100 apparel manufacturer and retailer, a leading online travel agency, and a global payment processing software provider.

Non-GAAP adjusted net income was $0.2 million, or $0 per share, down from $1.5 million, or $0.03 per share, in the prior-year period. Analysts were expecting EPS of $0.01. LivePerson lost $0.17 per share on a GAAP basis, in part due to charges related to litigation fees, a one-time CEO compensation payment, and severance.

LivePerson expects to return to double-digit growth in 2018, calling for full-year revenue between $237 million and $243 million. That compares to $218.9 million of revenue in 2017. The company also expects to turn a non-GAAP profit of between $0.07 and $0.10 per share.

Now what

LivePerson CEO Robert LoCascio discussed the company's potential: "We are off to a solid start in 2018, as evidenced by our strategic expansion with Sky, and we are now targeting a return to double-digit growth at the midpoint of our 2018 revenue guidance range. We've never been more excited about the potential for LivePerson to fulfill its vision, and we will continue to invest in the product, partners and customer events that will drive this significant opportunity."

The last time LivePerson managed double-digit growth was the third quarter of 2015. It now looks like that long streak of disappointing results will come to an end this year.

10 stocks we like better than LivePersonWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and LivePerson wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 5, 2018

Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends LivePerson. The Motley Fool has a disclosure policy.