How might this deleveraging transaction influence analyst earnings forecasts and the forward P/E multiple for LPSN?

The deal cuts LivePerson’s 2026 convertible debt ( $341 m ) out of the capital‑structure and replaces it with a modest cash infusion, a longer‑dated $115 m senior‑subordinated secured note and a mix of common‑ and preferred‑equity. By swapping a high‑interest, near‑term liability for a lower‑cost, longer‑dated instrument and equity, the company will slash its interest expense and free up cash flow that can be used to fund growth initiatives or further balance‑sheet strengthening. Analysts are therefore likely to upgrade earnings forecasts – the reduction in financing costs alone should lift net‑income by a few cents per share, while the equity component gives the firm a “free‑cash‑flow” runway that can be translated into higher top‑line growth assumptions.

Because the earnings base is being expanded while the market will still price the stock at roughly its current level (the transaction is a balance‑sheet clean‑up rather than a revenue‑boosting catalyst), the forward P/E is expected to compress. In other words, the forward‑P/E multiple should fall as the revised EPS estimates rise faster than the share price, rewarding the stock with a more attractive valuation. From a trading standpoint, the deleveraging removes a near‑term risk premium, so a short‑to‑mid‑term bounce toward the $30–$32 range (vs. today’s $28‑29) is plausible, especially if analysts collectively lift their 2025‑2026 EPS guidance. Conversely, any signs that the new 2029 senior notes carry a higher coupon or that the equity issuance dilutes existing shareholders could cap upside, so monitor the pricing terms of the senior notes and the dilution impact on the next earnings release.