LivePerson, Inc. (NASDAQ:LPSN)

CAPS Rating: 4 out of 5

The Company is a provider of hosted software, which enables customers to assist their online visitors.


Player Avatar paradigms (36.57) Submitted: 1/18/2011 1:59:37 AM : Outperform Start Price: $11.89 LPSN Score: -41.24

I can’t ignore LivePerson (LPSN) any longer. I often favor value stocks, but I also like growth stocks, so long as I can really understand what the company does and provided it has a sterling balance sheet. Well, LPSN has got both areas covered: it develops software applications for ecommerce so businesses can better interact with their customers (read: increase conversion rates and provide better customer service) and it has a sterling balance sheet.LPSN carries absolutely no debt (0.00 long-term and total debt to equity ratios) and has plenty of cash on hand, evidenced by a 3.3 quick ratio and a 3.5 current ratio. I’m averse to investing in companies with too much debt, so I imagine I’ve accordingly bypassed quite a few growth stocks with good growth potential, but in my mind, LPSN has both great growth potential without any of the risks that come from being overleveraged early in a company’s development.Like it or not, ecommerce is a growing part of a new shopping paradigm and companies like LPSN are going to be highly sought after because they provide actionable information to online businesses in an increasingly competitive retail landscape. With clients like IBM, The Home Depot, Verizon, Discover, Chase, and Wells Fargo, LPSN seems to be the leader of the pack. I also unwittingly used a LPSN product months ago when trying to redeem a coupon on an online clothier’s website and came away pleased with the experience, as they were able to take care of my concern and I immediately.LPSN is also very profitable: its 79.50% gross margin is almost double its industry average, and over the past five years, sales have grown 36.79%, and with any luck, its earnings should keep growing too. I guess you could say I'm sold on LPSN.

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