Is LiveRamp Poised to Deliver Strong Earnings and Price Upside in Q1 2026?

LiveRamp (NYSE: RAMP) has emerged as a compelling case study in the data-driven economy, leveraging its Data Collaboration Platform to navigate macroeconomic headwinds while delivering consistent revenue growth and profitability. As the company prepares to release its Q1 2026 earnings on August 6, 2025, investors are scrutinizing whether its recent momentum, upgraded guidance, and institutional confidence can translate into a meaningful price upside.

Earnings Momentum: A Story of Resilience and Strategic Execution

LiveRamp's Q2 FY25 results underscored its ability to adapt to shifting market dynamics. Total revenue hit $185 million, a 16% year-over-year increase, with subscription revenue growing 14% to $143 million and Marketplace & Other revenue surging 23% to $42 million. Non-GAAP operating income expanded to $41 million, reflecting a 22% margin—a 2 percentage point improvement from the prior year. This performance, coupled with a 13% year-over-year increase in gross profit, highlights the company's operational efficiency and pricing power.

The company's Rule of 31 (13% revenue growth and 18% operating margin in FY25) and its ambition to achieve a Rule of 40 (40% growth in operating margin) by FY28 further reinforce its long-term profitability strategy. These metrics suggest LiveRamp is not just chasing top-line growth but also prioritizing margin expansion—a critical factor for investors seeking sustainable value creation.

Upgraded Guidance: A Conservative Outlook with Room for Surprise

For Q1 2026, LiveRamp has guided to revenue of $191 million, a 9% year-over-year increase. While this represents a slight deceleration from the 13% growth in FY25, it aligns with the company's strategic shift toward profitability in a more cautious macroeconomic environment. Analysts, however, see room for optimism: the $191 million guidance is 0.9% above current estimates, and the full-year FY26 revenue range of $787–$817 million implies a 6–10% growth rate.

The upgrade in guidance is supported by LiveRamp's recent product innovations, including AI-powered destinations with Perplexity and Chalice, which enhance its clean room network. These advancements position the company to capture a larger share of the $1.2 trillion global advertising market, particularly as brands shift toward authenticated addressability and first-party data solutions.

Institutional Confidence: A Vote of Confidence from the Street

Institutional investors have been aggressively buying into LiveRamp's story. Jane Street Group LLC increased its stake by 68.5%, now holding $4.73 million in shares, while Goldman Sachs Group Inc. raised its position by 6.9% to $9.87 million. Royal Bank of Canada's 246.4% increase in holdings to $515,000 further underscores the institutional conviction in LiveRamp's long-term potential.

Analyst sentiment has also turned bullish. DA Davidson initiated coverage with a “Buy” rating and a $45 price target, while Morgan Stanley and Wells Fargo upgraded their price targets to $34 and $31, respectively. The average analyst rating is now a “Moderate Buy,” with a median price target of $41.29—nearly 30% above the current stock price of $31.98.

Risks and Considerations

While the fundamentals are strong, investors should remain cautious. LiveRamp's GAAP operating margin compressed slightly in Q2 FY25, and its P/E ratio of -3,198.00 reflects the challenges of valuing a high-growth stock with volatile earnings. Additionally, macroeconomic uncertainties, such as potential interest rate hikes or a slowdown in digital advertising spending, could pressure short-term performance.

However, LiveRamp's focus on cross-media intelligence, AI-driven personalization, and expanding its clean room network provides a buffer against these risks. The company's Rule of 40 target by FY28 also signals a disciplined approach to balancing growth and profitability.

Investment Thesis: Strategic Entry Ahead of Earnings

LiveRamp's combination of strong revenue growth, margin expansion, and institutional backing makes it an attractive candidate for a strategic entry ahead of its Q1 2026 earnings release. The stock's current valuation appears undervalued relative to its long-term growth prospects, particularly given the 54.8% projected annual EPS growth and 8% revenue growth.

Investors should consider the following:
1. Entry Point: The stock's 50-day moving average of $32.60 and 200-day average of $30.27 suggest a potential support level around $30–$32.
2. Catalysts: The Q1 2026 earnings release on August 6, 2025, and the company's AI-driven product roadmap could drive short-term volatility.
3. Position Sizing: Given the stock's beta of 1.00 and sector volatility, a conservative position size (e.g., 2–3% of a diversified portfolio) is advisable.

Conclusion

LiveRamp is navigating a complex macroeconomic landscape with a clear focus on innovation, margin expansion, and customer retention. Its upgraded Q1 2026 guidance, coupled with institutional and analyst optimism, suggests the company is well-positioned to deliver strong earnings and price upside. For investors with a medium-term horizon, a strategic entry ahead of the August 6 earnings release could offer a compelling opportunity to capitalize on LiveRamp's momentum.

As always, due diligence is key. Monitor the earnings call for clarity on Q1 2026 performance and the company's roadmap for AI integration. In a market where data is the new currency, LiveRamp's ability to monetize its platform could prove to be a defining factor in its next phase of growth.