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 customer service provider LivePerson (NASDAQ:LPSN) plummeted 34% today after its quarterly results and outlook disappointed Wall Street.
So what: LivePerson's first-quarter revenue rose a solid 16%, but a bottom-line miss -- adjusted EPS of $0.06 versus the consensus of $0.07 -- coupled with the loss of a major client is forcing analysts to seriously lower their valuation estimates. While the client's exit represents a lost revenue stream of just $5 million, it could be a more serious sign of waning demand for real-time assistance.
Now what: Management now sees full-year adjusted EPS of $0.18-$0.21 on revenue of $174 million-$179 million, well below the consensus of $0.32 and $183.8 million. "We're adjusting full year guidance based on the full year impact of Q1 attrition and the softening European market and increased investment necessary for the additional resources behind sales marketing and R&D to support the rollout of the LiveEngage platform," said CFO Daniel Murphy on a conference call. Of course, when you couple today's massive plunge with LivePerson's still-solid financial position -- $95 million in cash and no debt -- the downside might be limited enough to take a closer look.
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Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends LivePerson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.