In a report released today, Richard Baldry from Roth MKM downgraded Liveperson (LPSN – Research Report) to a Hold, with a price target of $2.00.
Richard Baldry has given his Hold rating due to a combination of factors impacting LivePerson’s financial performance and future outlook. LivePerson’s latest revenue and AEBITDA figures for the fourth quarter of 2023 have not only fallen short of expectations but also indicated significant year-over-year declines. Furthermore, the company’s guidance for 2024 suggests a substantial revenue shortfall, which raises concerns about its ability to maintain and grow its customer base. The departure of the company’s founder and subsequent internal disruptions have resulted in an unprecedented level of client cancellations, casting doubt on the new leadership’s ability to quickly reverse this trend. Baldry’s assessment reflects the uncertainty surrounding LivePerson’s potential for recovery and the effectiveness of its strategies to halt customer defections.
Additionally, LivePerson’s financial position appears strained, with sizeable convertible debt obligations maturing by the end of 2026 and the company’s current cash reserves likely to be insufficient to meet these commitments. Despite the company’s focus on reducing customer losses, the ongoing requirement for cost-cutting and headcount reductions could undermine efforts to stabilize and grow the business. Baldry’s lowered confidence in the company’s financial prospects, coupled with the challenges it faces in refinancing its debt and generating cash, supports his cautious stance and the downgraded price target, further justifying the Neutral rating for LivePerson’s stock.
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Liveperson (LPSN) Company Description:
LivePerson, Inc. engages in the provision of mobile and online messaging solutions. It operates through Business and Consumer segments. The Business segment enables brands to leverage intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment involves in facilitating online transactions between independent service providers and individual consumers seeking information and knowledge for a fee via mobile and online messaging. The company was founded by Robert P. LoCascio on November 29, 1995 and is headquartered in New York, NY.
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