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LivePerson Shares Fall 4% After Hours On Higher 3Q Loss

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LivePerson shares were down 3.9% in after-market trading on Thursday after the company missed analysts’ third-quarter earnings estimates.

On a reported basis, LivePerson (LPSN), a conversational AI solutions provider, posted a net loss per share of $0.58 in 3Q20 compared to a net loss per share of $0.41 in 3Q19. The higher reported net loss was due to significant lease restructuring and other one-time charges. The company’s adjusted loss per share of $0.12 was worse than analysts’ forecast of a loss per share of $0.06.

Meanwhile, LivePerson’s revenue grew 26% to $94.8 million due to “structural demand shift to Conversational AI” amid the pandemic. The 3Q revenue exceeded analysts' forecast of $92.6 million. The company disclosed that it signed 8 seven-figure deals and 133 deals in total in 3Q, including the addition of 48 new and 85 existing customer contracts.

The company also stated it is entering the fourth quarter with strong momentum and raised its full-year revenue guidance to a range of $362.5 million to $364.5 million compared to the previous guidance of $357 million to $361 million. The upgraded guidance reflects revenue growth of 24% to 25%.

It also boosted 2020 adjusted EBITDA guidance to the range of $29 million to $31 million compared to the prior outlook of $16 million to $19 million. However, LivePerson now predicts a higher full-year net loss per share between $1.77 and $1.80 compared to the previous forecast of net loss per share between $1.52 and $1.57.

In reaction to the earnings release, Oppenheimer analyst Koji Ikeda commented “LivePerson's beat-and-raise and strong cash generation in 3Q display solid execution and continued operating improvements.”

The analyst also said “On balance and while the upselling activity remains healthy and is benefiting from this year's pandemic trends, the net-new logos are not keeping pace with the installed-base sales. This development could end up being a drag on future revenue growth or potentially cause a growth slip in the outer years if the installed-base demand is simply being pulled forward from COVID-19 this year, and before payments and/or the channel expansion kicks in.”

Ikeda reiterated a Hold rating for LivePerson based on valuation. (See LPSN stock analysis on TipRanks)

Meanwhile, the Street is bullish about LivePerson with a Strong Buy consensus based on 10 Buys vs 1 Hold. With shares advancing by an impressive 54.2% year-to-date, the average analyst price target of $65 reflects upside potential of 13.7% for the coming months.

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