LiveRamp (RAMP) is a Compelling Post-Pandemic Buy

Identity resolution platform LiveRamp Holdings, Inc. (NASDAQ: RAMP)   shares were on the verge of a rebound as its Q3 FY2020 earnings beat resulted in a gap and crap. Upside follow-through was dismantled as systemic risk triggered a market meltdown from measures to extinguish the spread of COVID-19 as the S&P 500 (NYSEARCA: SPY) tanked (-35%) off its all-time highs in February 2020. The government-imposed lockdowns froze marketing and advertising budgets, but there is an increasing groundswell of support for phasing in restarts as businesses reopen the doors. With the majority of stay-at-home orders expiring at the end of April or early May, LiveRamp becomes a compelling economic rebound trade at opportunistic entry levels.   

What’s an Identity Resolution Platform?

In a nutshell, LiveRamp enables its clients to aggregate data pipelines across different systems to create a single source of truth for customer data. LiveRamp operates the world’s largest identity graph reaching over 170 million people. Clients can utilize big data analytics enabling effective and efficient marketing initiatives mapping consumer personas and behavioral profiles for the most relevant connections and insights. The omnichannel ecosystem enables seamless data integration for frictionless targeted onboarding that matches customers to their favorite brands utilizing sophisticated artificial intelligence (AI). In a nutshell, they enable data science to extract robust and relevant connections and metrics to enhance client marketing campaigns.

LiveRamp Q3 Fiscal 2020 Earnings

The company reported its Q3 Fiscal 2020 earnings on Feb. 5, 2020. The report represented results for the quarter ending Dec. 31, 2019. LiveRamp reported EPS of - $0.03 bearing consensus analyst estimates by +$0.05 on inline revenues at $102 million revenues, up 28% YoY with GAPP gross margins increasing to 63%. Subscription revenue grew 25% YoY at $82 million. Moving away from cookies, LiveRamp saw increased momentum with their IdentityLink, which is the first people-based ID for marketers, and Authenticated Traffic Solutions (ATS) work synergistically to be leveraged by brands, agencies and publishers to drive the evolution of data-driven marketing. Initial results demonstrated a 23% increase in measurable impressions, 24% higher click through rates and 20% higher publisher yields.

Shaping the Post-COVID-19 Restart Narrative

As geographical regions phase in post-COVID-19 restarts to state and regional economies, companies will also have to reboot marketing initiatives to stay competitive. LiveRamp solutions accelerate reboots efficiently and effectively as it harvests more innovative growth drivers. For example, harvesting second-party data sharing enables two disparate organizations to shares their consented data sets to optimize outcomes for both parties to enhance positive customer experiences. This concept has gained tremendous momentum among some its largest clients across non-correlated industries. The company has not provided or adjusted their outlook during the coronavirus pandemic, but the market has set the bar low.  Fiscal Q4 2020 earnings are due out May 26, 2020. Opportunistic entry levels can present themselves on pullbacks ahead of the release. 

Opportunistic Buy Levels

Using the rifle charts on the wider time frames including the weekly and daily to lay out the playing field is suitable for swing traders and investors. The weekly rifle chart formed a market structure low (MSL) buy trigger above the $29.74 level. The weekly stochastic completed its full down oscillation through the 20-band and coiled back up through the 20-band with a mini pup which officially triggered on the thrust through the $31.80 Fibonacci (fib) level. The daily stochastic formed a full upside oscillation through the 80-band before going into a make or break formation. This formation has two potential outcomes shaping up. The first outcome is a daily pup breakout forming on a stochastic cross up. In addition to the breakout, the potential for a seed wave pattern emerges with the higher MSLs. This projects three upside fib targets at $36.03 (1.27 fib extension), $37.16 (1.414 fib extension) and $38.58 (1.618 fib extension) and final potential reversal zone (PRZ). This final fib also overlaps with the monthly 5-period MA on a bearish mini inverse pup. The second outcome of the make or break presents opportunistic entry levels at the $31.80 fib, $29.74 weekly MSL trigger and $27.38 sticky 2.50s range/fib. Traders can consider short selling the $38.58 level for a reversion/pullback if it tests first. Swing traders can scale for overnight to multi-day holds on converging daily/60-minute stochastic. Longer-term investors may consider a pyramid sizing dollar-cost averaging approach with a covered call strategy to buffer downdrafts on pullbacks to the opportunistic entry levels.