The market was upset with the first quarter results for LivePerson Inc. (NASD:LPSN), but it was hard to find what was being faulted.
The company, which provides online conversation solutions, had revenue of $6.9 million for the period ending March 31, 2006, which was up 39% over the same period a year ago. The company added several new customers including Schwab, Hoovers, and Land's End. Income from operations dropped some from $425,000 a year ago to $156,000 in Q1 06, but stock-based compensation accounted for a good deal of this. EBITDA rose from $708,000 last year to $1,033,000.
LivePerson's revenue almost doubled from 2003 to 2005, when the company had a top line of $22.3 million. The company went from an operating loss of $849,000 in 2003 to a profit of $2.9 million last year. The company showed consecutive quarter revenue increases in each period of 2005, and going into 2006, the trend is continuing. The company guided for Q2 06 to be $7.4 to $7.5 million and the full year to be $30.0 to $30.5 million.
The market for the company's services would seem to be growing; live chat for business, enterprise customer e-mail management, and customer knowledgebase management are all in demand.
If the company has a weakness for investors, it is that the stock trades at 11.4 times sales, which is a premium valuation. But, with the recent pullback to $5.78 from a 52-week high of $7.84, and low of $2.24, the company's improving results should help it justify an above-market price to sales ratio.
LPSN 1-yr chart:
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at email@example.com.