M c I n t i r e I n v e s t m e n t I n s t i t u t e1
McIntire Investment InstituteAt the University of Virginia
LivePerson(NASDAQ:LPSN)
Prepared by Connor Davis| 17 February 2012
M c I n t i r e I n v e s t m e n t I n s t i t u t e
• Business Overview
• Stock Chart
• Thesis Points
• Market Misperceptions
• VAR
• Risks
• Recommendation
2
Agenda
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Business Overview
Online chat/customer service solutions
Uses real-time assistance to offer advice, facilitate sales
Contracts companies such as IBM, Cisco, HP, Microsoft
Obtains customer information useful to corporation
Lowers operating costs for corporations• (multiple support at once)
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Stock Chart
Share Price: $15.43 52 Week Range: $9.18-$15.59Market Cap: 821.78M Earnings Growth: +16%EPS: .22 Long-Term Debt: 0P/E (ttm): 71.08
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Thesis Points
• Strong Growth Potential
• E-Commerce On the Rise
• Leader in Industry– Customer Satisfaction
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Thesis 1: Strong Growth Potential
• Profit Margins Rising– 41%Net Income Increase from Q4 2010-2011– Net Income 12.04 Million up from 9.26 Million in 2010
(30% Increase)
• Sustainability– Added 25 New Customers– Beginning International Expansion (Untapped Market)
• Gaining Larger Market Share– Increased Brand Recognition
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Thesis 1: Strong Growth Potential
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Thesis 1: Strong Growth Potential
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Thesis 2: E-Commerce On the Rise
• E-Commerce Sales Rising– Internet sales growing at a rate of 19.4%
• Expansion Into New Industries– Healthcare, Insurance, Energy companies
beginning to use online support• Opens Opportunities for Acquisitions
– Many new start-ups with advanced technology ready to be acquired (history of acquisitions)
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Thesis 2: E-Commerce On the Rise
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Thesis 3: Leader in Industry
• Established frontrunner in a relatively new industry
• Customer Satisfaction increase for corporations
• Increasing conversions of sales, online transactions
• New technology – facts about users, continuing chat, QR codes
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Thesis 3: Leader in Industry
Awards
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Misperceptions
Tech Bubble• Online Support/Chat fad
Not as technologically advanced• Lacks certain features
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VAR
• LivePerson sales representative: “Open API being implemented”– Allows for third parties to create applications for and
integrate with software to bring new features• Analyst at Motley Fool: “Consumers may have
overreacted to the earnings results”– “Rally was overdone.”– “Small stocks with light volume are inherently more
volatile.”
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Risks/Signs We Could Be Wrong
• LivePerson’s competitors could begin incorporating new technologies that LivePersonalready utilizes
• If the global economy goes down, corporations may be less inclined to try out new services
• UPDATE: LivePerson’s stock jumped almost 25% amid recent earnings, so could be overvalued
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Trends to Monitor
• LivePerson’s Open API technology – if more and more companies begin using it
• Global economy – could signify greater desire for cost-savings• LivePerson’s stock price, if goes back down near previous close
of $12-$14 (better value)
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Recommendation
Continue monitoring LivePerson’sstock
If stock price falls below $14, initiate a purchase at 2.5%
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Questions?
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