LiveChat Software: Growth deceleration ahead (downgraded to HOLD)
We have downgraded our rating on LiveChat Software (LVC) to HOLD, from Buy, and lifted our price target (PT) from PLN 48/share to PLN 104/share, implying 12% upside potential. LVC’s share price has appreciated 120% ytd, as the company has managed successfully to increase the ARPU on both of its products, and delivered record-high calendar 1H20 results, with its EBITDA up 39%, fuelled additionally by the COVID-19 pandemic in 2Q20. Applying a sustainable ARPU growth assumption to our model (earlier, we had pencilled in flat ARPU) has made us lift our FY20/21E and FY21/22E EBITDA forecasts by 9-14%. We see the strong price performance as justified, and would take advantage of any major correction; however, currently, we are HOLDers of LiveChat as, based on the conservative outlook presented by its closest peers, we believe the positive pandemic impact on the demand for LiveChat’s products might be short term, and the results growth might decelerate in the coming quarters, triggering some profit taking.Livechat Software SA is a Poland-based company engaged in the software industry. The Company is a producer and global provider of software as a service (SaaS) LiveChat, communication software for business. LiveChat enables fast and intuitive communication between company's employees and customers visiting corporate Website. The application also tracks customers' activity on a Website. The Company produces and distributes software for business-to-consumer (B2C) and business-to-business (B2B) communication. Its product portfolio includes three types of LiveChat plans: Solo, dedicated to single user and offering such features as unlimited chats, ticketing system, enhanced security and basic reporting; Team, for numerous teams that additionally includes chat routing and groups creation; and Enterprise, for companies that, additionally to previous ones, provides advanced reporting, work scheduler and unlimited visits on a Website.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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