While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of LivePerson (NASDAQ: LPSN ) popped 8% today after Benchmark upgraded the customer service technologist from hold to buy.
So what: Along with the upgrade, analyst Mark Schappel planted a price target of $17 on the stock, representing 30% worth of upside to Friday's close. While value investors might be turned off by the stock's recent surge, Schappel believes there's plenty of room to run given the strong demand tailwinds working in LivePerson's favor.
Now what: According Benchark, LivePerson's risk/reward trade-off is particularly attractive at this point. "We think this is an appropriate time to reengage the story, since we believe several factors needed to move the stock appear to be in place today and we think they're sustainable over the medium-term," noted Benchmark. Of course, with LivePerson shares up about 75% from their 52-week lows and trading at a 50-plus forward P/E, I'd wait for a wider margin of safety before betting too heavily on Benchmark's call.
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