Stryker shares tumble despite strong Q2 results and raised guidance
On Friday, Cantor Fitzgerald analyst Thomas Blakey increased the price target for Five9, Inc (NASDAQ:FIVN) to $57.00, up from the previous $46.00, while maintaining an Overweight rating on the stock. Blakey highlighted Five9’s strong performance in the fourth quarter of 2024, noting the company’s accelerated top-line growth. The company achieved 14.4% year-over-year revenue growth, reaching $1.04 billion in the last twelve months. This growth was attributed to a surge in large deals and a sequential increase in bookings during the quarter. According to InvestingPro analysis, Five9 appears undervalued at its current market price of $41.69.
Five9’s success has been driven by the integration of artificial intelligence (AI) into its platform, which has been essential in enhancing customer experience (CX). The company has achieved a 100% attach rate to deals with an annual recurring revenue (ARR) exceeding $1 million. With a gross profit margin of 54.2% and a strong current ratio of 1.95, Five9 maintains solid operational efficiency. Blakey’s remarks underscore the significance of AI in propelling Five9’s business forward.
Looking ahead to the calendar year 2025, Five9 is poised to sustain its AI-driven momentum. The company’s growth strategy includes an expanding partnership-driven go-to-market (GTM) motion and the development of AI-related products. These products allow large partners to stream real-time voice and transcript data to their Agentic AI platforms via APIs, such as VoiceStream and Transcript Stream. Additionally, Five9’s platform-agnostic approach to large language models (LLMs) is expected to further its competitive edge in the market. InvestingPro data reveals multiple positive indicators, including expected profitability this year and projected 13% revenue growth for FY2025. For deeper insights into Five9’s growth potential and comprehensive analysis, check out the exclusive Pro Research Report, available to InvestingPro subscribers.
The analyst’s optimism is rooted in Five9’s strategic positioning, which leverages AI to improve its offerings and customer service capabilities. Blakey’s analysis indicates that Five9 is well-equipped to build on its current successes and continue its trajectory of growth in the upcoming year.
Five9’s stock price target adjustment reflects the company’s robust fourth-quarter performance and its potential for sustained growth driven by AI innovations and strategic partnerships. Blakey’s maintained Overweight rating suggests confidence in the company’s market position and its ability to capitalize on AI-driven opportunities.
In other recent news, Five9 Inc . reported impressive fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share of $0.79, compared to a forecast of $0.70. The company’s revenue reached $278.7 million, exceeding the expected $267.67 million, with a significant 17% year-over-year growth, driven by a 19% increase in subscription revenue. Five9’s AI segment showed substantial progress, with AI revenue growing 46% year-over-year and AI bookings accounting for over 20% of new enterprise logo bookings. Analysts at Needham maintained a Buy rating for Five9, with a price target of $52, expressing confidence in the company’s potential in the next-generation contact center market. Five9’s CEO highlighted the importance of AI, noting that AI revenue now constitutes 9% of enterprise subscription revenue. The company also provided a positive outlook for 2025, projecting revenue of $1.14 billion and non-GAAP EPS of $2.60. In corporate news, Five9 announced the retirement of long-time CFO Barry Zwarenstein, with Bryan Lee stepping in as interim CFO. These developments reflect Five9’s strong performance and strategic focus on AI and subscription services.
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