Last Update13 Oct 25Fair value Increased 1k%
Analysts have significantly raised their price target for LivePerson from $1.25 to approximately $18.75 per share, reflecting updated valuation insights and company performance metrics.
What's in the News
- LivePerson announced a significant expansion of its partnership with Google Cloud to integrate advanced AI capabilities into the Connected Experience Platform. This integration aims to enhance self-service, personalization, and customer journey optimization for enterprise brands (Company Announcement).
- At a Special Meeting on October 2, 2025, shareholders approved amendments to LivePerson's Certificate of Incorporation, authorizing a reverse stock split at a 1-for-15 ratio and a corresponding reduction in authorized shares. These changes are set to take effect on October 13, 2025 (Company Filings).
- The company also enacted an increase in authorized share capital from 200 million to 300 million common shares, effective October 3, 2025 (Company Filings).
- LivePerson revised its 2025 earnings guidance, lowering the expected annual revenue range to $230 million to $240 million. This represents a decrease of approximately 5% at the midpoint (Company Guidance).
- The company adopted its Fourth Amended and Restated Bylaws on August 8, 2025, updating governance policies and committee authorities (Company Filings).
Valuation Changes
- Fair Value Estimate has increased dramatically from $1.25 to approximately $18.75 per share.
- Discount Rate remains unchanged at 12.32%.
- Revenue Growth outlook is steady at negative 15.09% year over year, indicating no change from prior estimates.
- Net Profit Margin has declined marginally from 13.09% to 12.72%.
- Future P/E Ratio has fallen modestly from 9.44 times to 8.79 times.
Key Takeaways
- Reduced financial risk and strategic partnerships are strengthening customer trust, supporting contract renewals, and setting the stage for sustainable revenue growth.
- Investment in generative AI and platform integrations is driving customer efficiency, platform differentiation, and long-term improvements in pricing power and margins.
- Declining revenues, customer hesitancy, stiff competition, prolonged sales cycles, and reliance on cost-cutting highlight significant challenges to sustainable growth and profitability.
Catalysts
About LivePerson- Operates as a digital customer conversation.
- The successful refinancing and deleveraging of the balance sheet materially reduces financial risk, reassures enterprise customers about LivePerson's stability, and is expected to accelerate the pace of contract renewals and new business wins, positively impacting future revenue and reducing customer churn.
- Adoption of Generative AI features on LivePerson's platform grew 45% sequentially, with clear evidence from enterprise clients of improved efficiency and customer satisfaction; continued investment in differentiated AI will drive platform stickiness, higher pricing power, and improve gross margins over time.
- Deepening partnerships and integrations with Google Cloud and Databricks are set to enhance LivePerson's innovation cycle and capabilities, positioning the company to capture share from enterprises needing robust, scalable AI-powered customer engagement solutions, likely supporting higher long-term revenue growth.
- Migration to Google Cloud's infrastructure and Databricks' analytics environment is expected to deliver product and operational efficiencies, enabling resource reallocation toward innovation and driving improvements in operating leverage and net margins.
- The secular trend toward 24/7, omnichannel, AI-powered customer engagement is expanding LivePerson's addressable market, and resolving balance sheet uncertainty now positions the company to better capture this long-term demand-supporting sustained revenue growth and elevated recurring revenue visibility.
LivePerson Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming LivePerson's revenue will decrease by 15.1% annually over the next 3 years.
- Analysts are not forecasting that LivePerson will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate LivePerson's profit margin will increase from -62.7% to the average US Software industry of 13.1% in 3 years.
- If LivePerson's profit margin were to converge on the industry average, you could expect earnings to reach $21.8 million (and earnings per share of $0.19) by about September 2028, up from $-170.3 million today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.4x on those 2028 earnings, up from -0.5x today. This future PE is lower than the current PE for the US Software industry at 36.6x.
- Analysts expect the number of shares outstanding to grow by 6.36% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.
LivePerson Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Year-over-year revenue and bookings declines-hosted services revenue and professional services revenue both fell by 25–26% year-over-year, and deal values were down 9% YoY, indicating continued customer hesitation and renewal delays; if these trends persist, they may lead to sustained revenue weakness and impede long-term earnings growth.
- Persistent renewal hesitation from large enterprise customers-hesitancy partly attributed to concerns over LivePerson's financial stability and balance sheet, could result in significant revenue loss and increased customer churn risk, especially due to customer concentration and dependency on a few high-value contracts.
- Intensifying competition from both large cloud providers and agile AI-first startups-new entrants offering AI-powered bots are introducing increased "headwinds," which could erode LivePerson's market share, pressure pricing, and limit their ability to maintain or grow recurring revenue and gross margins.
- Slow enterprise buying cycles and extended decision making-macroeconomic uncertainty is prolonging sales cycles, especially as AI adoption creates new compliance processes and more decision-makers, potentially leading to delayed or cancelled deals, which threatens near
- and long-term topline growth.
- Ongoing need for cost-cutting and focus on financial discipline-LivePerson's improved EBITDA guidance is due partly to aggressive cost management rather than organic growth, suggesting underlying profitability challenges; failure to reignite top-line expansion could hamper margin recovery and ultimately depress net earnings over time.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $1.25 for LivePerson based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $1.5, and the most bearish reporting a price target of just $1.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $166.4 million, earnings will come to $21.8 million, and it would be trading on a PE ratio of 9.4x, assuming you use a discount rate of 12.3%.
- Given the current share price of $0.89, the analyst price target of $1.25 is 28.8% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.