We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. For example, the LivePerson, Inc. (NASDAQ:LPSN) share price is up a whopping 355% in the last three years, a handsome return for long term holders. The last week saw the share price soften some 4.8%.
Given that LivePerson didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 3 years LivePerson saw its revenue grow at 8.0% per year. That's pretty nice growth. Some shareholders might think that the share price rise of 66% per year is a lucky result, considering the level of revenue growth. A hot stock like this is usually well worth taking a closer look at, as long as you don't let the fear of missing out (FOMO) impact your thinking.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
LivePerson is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for LivePerson in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that LivePerson has rewarded shareholders with a total shareholder return of 99% in the last twelve months. That's better than the annualised return of 23% over half a decade, implying that the company is doing better recently. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.