Why LivePerson Stock Blasted 19% Higher Today

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What happened

Investors were really dialed in to consumer relations tech specialist LivePerson (LPSN 19.42%) at the end of the week. On Friday, the company’s share price leaped more than 19% higher, largely on the back of an analyst upgrade. That performance trounced even the frothy S&P 500 index, which rose by 1.6%.

So what

The analyst going on a bull run was Craig-Hallum’s Jeff Van Rhee, who changed his recommendation on LivePerson stock to buy from his previous hold. His price target on the shares was raised to $15 apiece, which if reached would mean a 30% improvement over the current level.

Van Rhee’s new take on LivePerson is due to what he considers to be a significant overreaction to the news that the specialized tech company’s latest set of earnings would be delayed. On Tuesday, it announced that it is rescheduling its fourth-quarter 2022 release. This is due to the longer-than-expected time needed to file its 2022 annual report in the form of a mandated 10-K regulatory document. 

LivePerson did not set a new date for either, but did say that as long as it files the 10-K within the Securities and Exchange Commission’s 15-day grace period it will be in the clear.

Now what

As often happens with such delays, dismayed investors sold off LivePerson aggressively. Van Rhee considers the resulting depressed price to be an opportunity.

In a new research note, he wrote that “We see the company as likely a double digit/mid-teens grower the next few years and trading 11x what we view as a likely EBITDA for ’23.”

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