The latest analyst coverage could presage a bad day for LivePerson, Inc. (NASDAQ:LPSN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from LivePerson's nine analysts is for revenues of US$318m in 2024, which would reflect a painful 21% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 30% to US$0.87 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$402m and losses of US$0.92 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

Check out our latest analysis for LivePerson

The consensus price target fell 50% to US$2.14, with the dip in revenue estimates clearly souring analyst sentiment, despite the forecast reduction in losses.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the LivePerson's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 21% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LivePerson is expected to lag the wider industry.

The Bottom Line

Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that LivePerson's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on LivePerson after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for LivePerson going out to 2025, and you can see them free on our platform here.