Liveramp Holdings Inc (NYSE:RAMP) shares have maintained a constant uptrend since rebranding. In July, the stock lost a great deal of value while still trading as Acxiom. However, reports of the impending rebranding injected a new fervor in demand for the stock.
Acxiom acquired Liveramp in 2014 for $310 million. Interestingly, the transaction has turned out to be the most successful in the industry. At the time of acquisition, Liveramp was only 22% of Acxiom’s market cap. By July last year, the company was worth over $1.5 billion, tens of times the initial buying price.
After trading at prices under $30 for most of the period from 2014, the stock finally broke resistance. In September 2018, the stock hit an all-time high of a little over $50.
Notably, the ability of Liveramp to rake in revenue in large numbers was responsible for high price action. Interestingly, were Liveramp, an independent company, it would have set the record as the fastest growing Software-as-a-service (SaaS) company.
Nonetheless, the sterling performance attracted a lot of investor activity in the equity market. Interestingly, the stock traded for much of the three months leading to November above 50-day and 200-day moving averages.
Mainly, the only time the firm broke support was in mid-October. Interestingly, this could have been as a result of the rebranding reports.
Before rebranding, Acxiom first announced plans to spin of Acxiom Marketing Services (AMS), a subsidiary. The plans to sale AMS solidified after investor approval in late September. In particular, Acxiom finalized the rebranding plans immediately sale of AMS.
The equity market quickly responded to the developments with stock breaking resistance albeit momentarily. Nonetheless, the stock is merely oscillating around the 50-day moving average price of $46.04.
Liveramp’s stock faces the risk of dropping further below support, having already dropped to $44.41, the current price. Particularly, the stock lacks enough strength to propel it past resistance.
Further, the Williams %R indicates that the stock could succumb to the bears if the current downtrend holds.
First quarter results
In its first-quarter results since rebranding, the firm reported high revenue growth. With total revenue up 20% to $65 million, the firm looks set for further growth.
Further, the firm saw subscription revenue for the quarter climb to $55 million. As such, the firm now boasts of 30% revenue growth year-on-year.
Liveramp has a lot of cash on hand especially after selling AMS. Notably, the firm settled all outstanding debts. This is to say that Liveramp does not have a massive burden of liabilities currently.
Interestingly, the firm is using the cash windfall to repurchase shares. Therefore, investors should expect the stock to pick up momentum in future trading sessions.
According to LiveRamp CEO Scott Howe, the firm will leverage its position as the most significant player in the niche to grow. According to Howe, the firm provides “identity for the customer experience economy.”
“Looking ahead, we are focused on further extending and strengthening our network and delivering innovative solutions to our global customers,” Howe said.
Particularly, investors should look out for implied volatility in Liveramp’s stock. Analysts agree that there is a high possibility of implied volatility in the stock. This is because the analysts anticipate increased price action in the future. However, it is likely that the price could go south depending on various parameters.
Given the recent steps the firm is taking, it has a high probability of revenue growth. Notably, Liveramp boasts 25 new direct customers it added during the second quarter FY2019. Further, the firm is operating a Data Store in the Asia Pacific region to facilitate operations.