November 7, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of relationship management software specialist LivePerson (Nasdaq: LPSN ) plunged 13% today after its quarterly results and guidance missed Wall Street expectations.
So what: LivePerson's third-quarter profit managed to meet estimates, but a small miss on the top line -- revenue of $39.7 million versus the consensus of $41.1 million -- coupled with disappointing current-quarter guidance is fueling concerns over slowing growth going forward. While the company signed a record number of deals in the quarter and saw its bookings top $8 million, it wasn't enough to satisfy Wall Street's lofty expectations.
Now what: Management now sees fourth-quarter EPS of $0.07-$0.09 on revenue of $41.5 million-$42 million, well below Wall Street's view of $0.10 and $44.7 million. "[W]e saw continued strength in many of our key business and financial metrics, all indicators that point to the overall health of the business," CEO Robert LoCascio reassured investors. "We also continued to strengthen our core product offerings, making substantial progress with the integration of our advanced predictive targeting capabilities, rolling out a fortified turnkey mobile solution and advancing with our overall platform strategy." When you couple today's price pullback and guidance reset with the still-significant long-term trends working in LivePerson's favor, betting on that bullishness might not be a bad idea.
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