When Will Someone Love LivePerson?

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It's Valentine's Day, but LivePerson (NAS: LPSN) continues to artfully dodge Cupid's arrows.

Growing tech companies that enhance e-commerce have been popular buyout bait. Oracle (NAS: ORCL) snapped up Art Technology Group a little over a year ago, and eBay (NAS: EBAY) followed a few months later with its $2.4 billion deal for GSI Commerce.

Oracle and eBay may be serial acquirers, but they're smart enough to know the math of scalability. Paying a premium for a fast-growing company with a technology that can be more widely marketed by a larger tech giant is easy money.

LivePerson is definitely growing. The provider of Web-based chat support for many of the Internet's larger websites and online retailers posted healthy fourth-quarter results last night. Revenue climbed 22% to $36.5 million. Adjusted earnings climbed 26% to nearly $5.8 million -- or $0.10 a share. Analysts were expecting a little more on the top line and a little less on the bottom line, but the mixed showing doesn't take away from respectable growth that LivePerson has been consistently cranking out lately.

LivePerson added 25 new customers during the quarter, expanding its relationship with several existing accounts.

Arming companies with a pop-up window for live support may seem hokey, but it's cost effective when pitted against email or call center options. LivePerson's proactive platform can also dive in when it feels as if someone is about to abandon a virtual shopping cart or can't find answers on a site's help section. In other words, it converts sales and keeps customers happy.

LivePerson's going to keep growing. It's eyeing an adjusted profit of $0.40-$0.44 a share on $160 million-$165 million in revenue. Going by the midpoints of that guidance we're looking at revenue growth of 22% and a 17% in adjusted earnings per share on slightly more shares outstanding.

Is Cupid stupid? Well, the one knock after talking up LivePerson's chatty personality is that the stock isn't exactly cheap. It fetches more than four times revenue and roughly 30 times this year's projected profitability.

Oracle hooked up with Art Technology Group at a cheaper multiple, but the company was also growing slower on the top line and delivering declining profitability. eBay also paid lower premiums for the larger GSI Commerce, but GSI was also coming off a small loss the prior year. LivePerson is in far better performance shape than its peers -- and perfectly ready to grow on its own as a swinging single for many more Valentine's Days to come.

Person of interest
I recommended LivePerson to Rule Breakers subscribers at $6.73 last year, and the stock has gone on to nearly double.

True to the CAPScall initiative, I should also point out that LivePerson has served me well by beating the market on Motley Fool CAPS. It's time to discover the next Rule-Breaking multibagger. It's a free report. Want it? Get it.

At the time this article was published Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Motley Fool owns shares of Oracle.Motley Fool newsletter serviceshave recommended buying shares of eBay and LivePerson.Motley Fool newsletter serviceshave recommended writing puts in eBay. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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