What happened

Shares of LivePerson (NASDAQ:LPSN) popped 96.2% in 2019, according to data from S&P Global Market Intelligence, after the online chat platform provider repeatedly delivered better-than-expected quarterly results.

A man pointing to a bar/arrow chart indicating gains


So what

LivePerson started the year strong by hitting an all-time high on the heels of its impressive fourth-quarter update in February, which included the company's strongest revenue growth (at 14.5%) in three years. The company effectively sustained that top-line momentum detailing 14% growth with its Q1 report in May -- though shares took a breather after almost tripling over the previous year. However, the stock rallied to fresh highs yet again starting in August after posting an accelerated 15.1% increase in revenue for the second quarter. 

That said, the market subsequently indicated it's not always willing to accept growth for the sake of growth. LivePerson stock most recently sank more than 16% in a single day in November -- a drop from which it still hasn't fully recovered -- after the company said revenue soared 17% in the third quarter, but also saw its net loss widen significantly to $0.41 per share (from $0.12 per share a year earlier).

"Our revenue growth is inflecting as leading brands turn to LivePerson and our Conversational Commerce Platform to profoundly change the way they deliver care, sales, and marketing experiences to customers," elaborated LivePerson's founder and CEO, Rob LoCascio.

Now what

To be fair, it's not terribly uncommon for high-growth stocks to forsake profitability in favor of driving top-line gains and taking market share in the early stages of their long-term stories. And similar to the pause we saw last May, Liveperson's November pullback could be at least partly a function of traders taking some of their quick profits off the table before its upward trend resumes.

Indeed, the company noted in November that it expects the accelerating revenue trend to continue into the fourth quarter and through 2020. Given the incredible momentum LivePerson demonstrated last year, it should come as no surprise that its share price responded in kind.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.