KeyBanc: LivePerson Poised For Revenue Reacceleration, Margin Expansion

Recent sales investments by LivePerson, Inc. (NASDAQ: LPSN) should result in strong new enterprise customer adds and expand the opportunity at existing customers, driving revenue reacceleration and margin expansion, according to KeyBanc Capital Markets.

The Analyst

Steve Enders initiated coverage of LivePerson with an Overweight rating and $36 price target.

The Thesis

LivePerson’s presence as a leading provider of web chat software for over two decades has generated massive, contextually rich data that the company is using to build AI and automation capabilities into its B2C messaging platform, Enders said in the Thursday initiation note. (See his track record here.) 

Access to such data and the strong early adoption on leading messaging channels like Apple Business Chat, WhatsApp and Facebook Messenger should enable LivePerson to become a leader in conversational commerce with enterprise customers, the analyst said. 

Enders expressed optimism regarding the company’s near-term opportunities given the emerging use cases and market tailwinds.

LivePerson has expanded its sales force to capitalize on the conversational commerce opportunity and expects to nearly double its rep count in the second quarter from the levels seen at the end of 2018, he said. 

BofA expects this initiative to boost the company’s revenue growth from the mid-teens in 2018 to over 20% in 2021 and its EBIT margin from negative 1% to 7%. 

Price Action

LivePerson shares were up 1.12% at $29.82 at the time of publication Friday. 

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