Focus on better targeting of clients
We met with LiveHire's (LVH) new Managing Director and CEO, Christy Forest, who was appointed on the 12th June. While she has been in the CEO role for less than a month, she has already begun developing plans to improve the company's performance. To improve the conversion rate for potential new clients the company plans to develop better client profiling systems and more sharply focused work on integrations with third-party vendor systems.
In our view, Christy Forest has the right skill set, experience and strategy to restore the company's growth trajectory.
No change to forecasts, valuation
As LiveHire is in a reporting black-out ahead of the release of its full-year results there are no changes to our forecasts. We will revise our forecasts, valuation and share price target after the release of the annual results.
Risks and catalysts
Risks to our forecasts and the LVH share price include:
- new direct clients taking longer to generate revenues;
- global RPO clients may be slower to generate new revenues than we have forecast; and
- more serious competition from global HR technology groups.
Potential near-term re-rating catalysts include:
- LVH is successful in signing several very large clients which result in higher revenues than we have forecast;
- global RPO clients sign new clients and generate revenues faster than we have forecast; and
- major global HR technology providers integrate with the LVH system.
LiveHire (LVH) offers investors participation in the growth of a game-changing recruitment system. Should the company be successful in implementing its strategy. the rewards for shareholders could be substantial. However, the company is an early-stage technology business and has yet to become self-sustaining from a cash-flow perspective. The stock is high risk and should be avoided by investors with a low risk profile.
As the stock trades well below our valuation and share price target, we retain our Add recommendation.
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Disclaimer(s): Morgans Corporate Limited was Lead Manager for the placement of shares in LiveHire Limited and received fees in this regard.
Analyst owns shares.
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