Critical Analysis: LivePerson (LPSN) vs. ACI Worldwide (ACIW)

LivePerson (NASDAQ: LPSN) and ACI Worldwide (NASDAQ:ACIW) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

74.8% of LivePerson shares are held by institutional investors. 11.4% of LivePerson shares are held by company insiders. Comparatively, 4.2% of ACI Worldwide shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for LivePerson and ACI Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LivePerson 0 2 5 0 2.71
ACI Worldwide 0 1 4 0 2.80

LivePerson currently has a consensus target price of $13.76, indicating a potential downside of 4.08%. ACI Worldwide has a consensus target price of $25.00, indicating a potential upside of 2.29%. Given ACI Worldwide’s stronger consensus rating and higher possible upside, analysts plainly believe ACI Worldwide is more favorable than LivePerson.

Profitability

This table compares LivePerson and ACI Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LivePerson -13.29% -8.71% -5.58%
ACI Worldwide 2.47% 8.92% 3.59%

Volatility & Risk

LivePerson has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, ACI Worldwide has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Earnings and Valuation

This table compares LivePerson and ACI Worldwide’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LivePerson $215.63 million 3.92 $8.16 million ($0.50) -28.70
ACI Worldwide $1.03 billion 2.80 $173.08 million $0.22 111.09

ACI Worldwide has higher revenue and earnings than LivePerson. LivePerson is trading at a lower price-to-earnings ratio than ACI Worldwide, indicating that it is currently the more affordable of the two stocks.

Summary

ACI Worldwide beats LivePerson on 8 of the 13 factors compared between the two stocks.

About LivePerson

LivePerson, Inc. (Liveperson) is a provider of mobile and online business messaging technologies that power digital communication between brands and consumers. The Company’s segments include Business and Consumer. The Business segment enables brands to leverage its cloud-based LiveEngage’s intelligence engine. The Consumer segment facilitates online transactions between independent service providers (Experts) and individual consumers (Users) seeking information and knowledge for a fee through mobile and online messaging. The Company’s platform, LiveEngage, enables businesses to create a meaningful connection with consumers by offering messaging as a preferred channel of communication. The Company’s products and services include LiveEngage, Professional Services and Consumer Offering. As a cloud computing or software-as-a-service (SaaS) provider, LivePerson provides solutions on a hosted basis. LiveEngage enables the combination of real time on-site data and off-site behavioral data.

About ACI Worldwide

ACI Worldwide, Inc. develops, markets, installs and supports a line of software products and services primarily focused on facilitating electronic payments. The Company also distributes or acts as a sales agent for software developed by third parties. Its products and services are used principally by financial institutions, retailers, billers and electronic payment processors, both in domestic and international markets. The Company’s products are sold and supported through distribution networks covering three geographic regions, including the Americas, Europe/Middle East/Africa (EMEA) and Asia/Pacific. The Company’s products and services are used by a range of transaction-generating endpoints, including automated teller machines (ATM), retail merchant point-of-sale (POS) terminals, bank branches, corporations and Internet commerce sites. The Company provides payment solutions to financial institutions globally for both retail banking and transaction banking services.

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