LivePerson Loss Widens, CFO Steps Down and Analysts Issue Critical Notes

LivePerson shares slumped after the messaging-technology company reported a wider fourth-quarter loss, the chief financial officer stepped down, and analysts issued critical comments.
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LivePerson (LPSN) - Get Report shares slumped after the messaging-technology company reported a wider fourth-quarter loss, the chief financial officer stepped down, and analysts issued critical comments.

At last check LivePerson shares were off 24% at $34.31.

The New York company posted a net loss of $27.3 million for the quarter, widening from $6.5 million in the year-earlier period. Revenue jumped 20% to $79.1 million from $65.7 million.

It said CFO Chris Greiner would step down and would be succeeded by John Collins, currently senior vice president of quantitative strategy. LivePerson said that Collins, who joined in October, was recruited by Greiner. 

Oppenheimer analysts lowered their rating on the company’s stock to perform from outperform and removed their $50 share price target.

“We commend LivePerson for raising the awareness of the conversational messaging opportunity, which we continue to believe is ripe for disruption,” the analysts wrote in a report.

“However, the business reported mixed fourth-quarter results, guided 2020 profitability below consensus, and announced a CFO transition, which raises risks to estimates.”

The company is increasing investment in new payment products this year. And it’s trying to compensate for that spending with “yet-to-be-proven artificial-intelligence-driven internal automation efficiency initiatives to drive operating leverage and generate offsetting Ebitda,” the analysts said.

“We move to the sidelines until there are concrete data points that the growth acceleration ramp is on target, and the internal efficiency gaining strategies are working.”

KeyBanc Capital Markets analysts cut their share-price target to $43 from $48 and affirmed their overweight rating.

“While LivePerson reported strong deal activity, the company announced another step-up in operating expenditures to build out its payments solution, while also announcing a CFO transition,” the analysts wrote.

“We are lowering our multiple slightly to 6.5 times 2021 enterprise value to revenue to account for” the operating expenditures increase.