Please ensure Javascript is enabled for purposes of website accessibility

Why LivePerson Stock Tanked Today

By Evan Niu, CFA – Oct 30, 2020 at 12:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The conversational technology company reported third-quarter results.

What happened

Shares of LivePerson (LPSN -6.44%) have tanked today, down by 9% as of noon EDT, after the company reported third-quarter earnings. The results were mixed relative to consensus estimates.

So what

Revenue in the third quarter increased 26% to $94.8 million, topping the $92.6 million in sales that Wall Street was expecting. That resulted in a net loss of $38.7 million, or $0.58 per share, which was significantly worse than the $0.06 per share in red ink that analysts were modeling for. The conversational technology company reported adjusted EBITDA of $15.1 million.

Red stock chart going down

Image source: Getty Images.

"A second consecutive quarter of 25%-plus revenue growth validates that LivePerson is at the forefront of a consumer-led, structural demand shift to Conversational AI," CEO Rob LoCascio said in a statement. "Consumers are turning to AI-powered messaging as a preferred alternative to visiting stores, calling 1-800 numbers or surfing the web, and LivePerson's Conversational Cloud is setting the industry standard for this new set of technologies."

Now what

LivePerson hopes to report its first $100 million quarter in Q4. Guidance calls for revenue of $98 million to $100 million, which should lead to a net loss per share of $0.33 to $0.36. Analysts are currently looking for $97.4 million in sales next quarter.

The company boosted its full-year outlook and now expects revenue of $362.5 million to $364.5 million in 2020, up from a prior forecast of $357 million to $361 million. "With strong momentum in the business, we are once again raising guidance for 2020 and targeting our first $100 million quarter in Q4," LoCascio added.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends LivePerson. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.