Mizuho Likes LivePerson's Successful Transition To Modern Platform

Following its successful transition to the LiveEngage platform, LivePerson, Inc. LPSN seems well-positioned to generate accelerating growth, with margin expansion, according to Mizuho.

The Analyst

Mizuho’s Siti Panigrahi initiated coverage of LivePerson with a Buy rating and a price target of $45.

The Thesis

Although LivePerson recorded revenue declines in 2016 and 2017, it has transitioned successfully from its legacy product to an AI-based, modern messaging platform, Panigrahi said in the initiation note.

He added that the LiveEngage platform gives LivePerson a competitive advantage and the company could benefit from “the emerging conversational commerce trend and consumers' increasing preference for messaging over voice to engage with brands.”

LivePerson doubled its sales force in 2019, investing in “what we believe to be an attractive greenfield opportunity of greater than $60 billion,” Panigrahi wrote. He believes this was a good decision by the company, which should result in accelerated revenue growth and margin expansion for the next couple of years.

The analyst considers the Street’s current revenue growth estimates for 2020 and 2021 as conservative and expects the company to achieve 21.3% and 23.2% revenue growth in these years. He added that the company could generate 25% revenue growth in 2022.

Price Action

Shares of LivePerson were up 1.62% to $40.16 at time of publication Friday.