Investing can be hard but the potential fo an individual stock to pay off big time inspires us. You won’t get it right every time, but when you do, the returns can be truly splendid. One such superstar is LivePerson, Inc. (NASDAQ:LPSN), which saw its share price soar 424% in three years. It’s also good to see the share price up 38% over the last quarter. This could be related to the recent financial results, released recently – you can catch up on the most recent data by reading our company report.
LivePerson isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last three years LivePerson has grown its revenue at 0.9% annually. Considering the company is losing money, we think that rate of revenue growth is uninspiring. So we’re surprised that the share price has soared by 74% each year over that time. We’ll tip our hats to that, any day, but the top-line growth isn’t particularly impressive when you compare it to other pre-profit companies. The company will need to continue to execute on its business strategy to justify this rise.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
If you are thinking of buying or selling LivePerson stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We’re pleased to report that LivePerson shareholders have received a total shareholder return of 74% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.