Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of LivePerson Inc. Jumped 10% Today

By Timothy Green - Mar 14, 2016 at 4:00PM

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 provider of online messaging solutions has seen its shares bounce from a deep low carved out in February.

Image source: LivePerson.

What: Shares of LivePerson (LPSN 2.06%) jumped on Monday on no company-specific news. The stock has been tumbling since the beginning of 2015, but has rebounded strongly over the past month. At 3:15 p.m. ET, the stock was up about 10%.

LPSN Chart

LPSN data by YCharts.

So what: In early February, shares of LivePerson reached lows not seen since the financial crisis, driven by disappointing guidance. The company expects first-quarter revenue in a range of $55 million to $56 million, well below analyst expectations of $62 million, and down from the $60 million LivePerson reported during the year-ago period. With the stock's valuation long based on the company's rapid growth, this slowdown has done a number on the stock price.

The steep drop in February may have been an overreaction, however, as the stock has gained back significant ground since then. None of the rise, including the jump on Monday, has had any real news behind it, suggesting that investors have been taking advantage of a depressed stock price.

Now what: With LivePerson expecting to report lower revenue in 2016 compared to 2015, investors have been understandably concerned about the company's growth story. CEO Robert LoCascio painted an optimistic picture, despite the company's revenue headwinds:

We're seeing remarkable validation for LivePerson's platform and vision with the signings of our largest ever initial deals and our first commitment from an enterprise for a fully mobile deployment. Understanding that we have the critical task of migrating our enterprise customers to LiveEngage, we have lowered our revenue expectations for 2016. We are confident, however, that adjusted EBITDA margins will increase, even as LivePerson navigates the final stages of this transition.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

LivePerson, Inc. Stock Quote
LivePerson, Inc.
$15.89 (2.06%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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