It took 10 years for shares of LivePerson (Nasdaq: LPSN) to break out of the single digits. It's going to have to perform better than last night's quarterly report if it wants to stay in the double digits.
The live chat specialist posted results and issued guidance that fell short of expectations on a few line items.
Revenue climbed 21% to $29.9 million, just shy of the $30.3 million that the pros were targeting. Adjusted earnings clocked in flat at $0.09 a share, but that was actually in line with Wall Street's forecast.
LivePerson's guidance for the current quarter is another disappointment. The $30 million to $30.5 million range suggests the sequential growth that investors have come to expect out of the dot-com darling will continue, but analysts were perched on the $30.8 million mark. Wall Street is also pegging LivePerson's adjusted profit to come in at $0.08 a share, and that's the high end of its bottom-line range.
Looking out to all of 2011, LivePerson's guidance of adjusted profitability of $0.33 a share to $0.36 a share is well short of the $0.39 a share that analysts were counting on, though LivePerson's 21% to 24% revenue-growth goal is actually ahead of Mr. Market's mark.
Add it all up, and this wasn't a disastrous embarrassment of a quarter. It just wasn't what investors were counting on from a company whose stock has nearly doubled over the past year.
LivePerson's flagship enterprise business remains strong, offering a platform where companies can use web-based chat to provide more cost-effective customer assistance than call centers and more immediate responses than email. This accounts for nearly 88% of LivePerson's business, and it grew by 23% over the past year.
LivePerson tacked on 14 new enterprise customers during the period, including Petco and one of Europe's largest banks. It also expanded its existing business with several of its clients including Vodafone (NYSE: VOD) and Adobe (Nasdaq: ADBE).
LivePerson's platform flat out works. It's not just some easily coded chat platform that customer-facing websites can whip up internally. ValueVision Media's (Nasdaq: VVTV) ShopNBC.com -- one of LivePerson's accounts -- issued a report last year, claiming that website visitors who lean on LivePerson's chat interface convert at a much higher rate and place larger orders than those who do not. LivePerson's platform can be proactive, sensing when a virtual shopping cart is about to be abandoned or when someone scouring an FAQ is about to go ballistic. Going with LivePerson's engagement solution generated a 299% return on investment at ShopNBC in ValueVision's study.
We also can't dismiss LivePerson as a buyout candidate. When Oracle (Nasdaq: ORCL) snapped up Art Technology Group last year, it drew investors to LivePerson, GSI Commerce (Nasdaq: GSIC), NetScout (Nasdaq: NTCT) and other enterprise specialists that help enhance a website's effectiveness.
The dip this morning after last night's miss may be scaring away investors, but it may also be a dinner bell to opportunistic tech giants locked in a never-ending arms race.
I recommended LivePerson to Rule Breakers subscribers at $6.73 last year. The stock has performed well, even with last night's hiccup. As long as IT spending continues to improve, and LivePerson scores sequential revenue gains, LivePerson will earn its place in the land of double digits.
Are you invested in any obscure companies that deserve more attention? Share your thoughts in the comment box below.
