LivePerson (LPSN) is a small cap ($2.6 billion) company that has developed an AI-powered conversational platform, explains growth stock specialist Mike Cintolo, editor of Cabot Top Ten Trader.
The platform makes it easy for consumers to purchase products online and to get help from agents through various messaging channels, including text, Apple Business Chat, Facebook Messenger and WhatsApp, as well as the chat tools that brands imbed in their websites and apps.
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You’ll probably notice the company’s logo on some chat boxes if you pay attention as LivePerson has over 18,000 customers.
The stock is doing well because quarterly revenue growth has been steady in the mid-teens since early-2018 and is expected to accelerate to over 20% in 2020, when losses should dwindle off, setting the company up for a return to profitability in 2021.
Drilling down, analysts like that management upped guidance after the Q2 report on July 31, citing a record nine $1 million-plus deals (the same number signed in all of 2018).
This was the fifth straight quarter of least 20% gain in revenue per user and the fact that a majority of its top 10 signings were multi-year deals, providing solid recurring revenue going forward.
With demand apparently surging and a sales force that appears up to the task of landing big and small fish alike, analysts see LivePerson gaining share in the so-called conversational commerce industry. We like the trends in the business and the stock.
LPSN has been public for over a decade but its coming out party started in early 2018, when LPSN broke out at 15 and surged to 27 before the late-year market plunged yanked it down.
But the stock quickly snapped back to new highs in February, and after a three-month rest, broke out again in July. LPSN has advanced persistently since then, and while it’s extended to the upside, its continued strength is impressive. Aim to enter on weakness.
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