On Friday, Piper Sandler, a well-known financial firm, increased its price target on shares of Five9, Inc (NASDAQ:FIVN), a leading provider of cloud contact center software. The new price target has been set at $46.00, up from the previous figure of $35.00. The firm has also reiterated its Overweight rating on the stock.
Following the close of the market, Five9 reported its third-quarter earnings, highlighting the company's performance and future prospects. The results indicated a significant reacceleration in key lead metrics, which bolstered the credibility of the company's FY25 guidance.
This guidance was better than what was initially feared by the market and suggests a stabilization in Five9's business. In response to the positive earnings report, Five9's shares surged by more than 20% in after-hours trading.
In contrast, RingCentral (NYSE:NYSE:RNG), a company that operates in the same sector as Five9, also reported its quarterly earnings. The quarter met expectations, with particular strength noted in emerging solutions like RingCX and unexpected upside in the small and medium-sized business (SMB) sector. RingCentral also announced a new partnership with Verint, which is expected to help the company advance its RingCX offering to larger markets.
Despite the positive developments for RingCentral, Piper Sandler maintained a Neutral rating on its stock with a price target of $38.00. The firm acknowledged RingCentral's successful execution on emerging products and free cash flow but expressed ongoing concerns regarding the unified communications as a service (UCaaS) market.
Piper Sandler's commentary underscored the strategic options and potential catalysts ahead for Five9. The firm's positive outlook on Five9 is based on the company's current performance and its ability to capitalize on the strength of the Contact Center as a Service (CCaaS) market, powered by core and AI bookings.
In other recent news, Five9, Inc. has been experiencing a series of notable developments. The company's third-quarter results exceeded expectations, with both earnings and revenue surpassing estimates. The company also reported a 20% growth in subscription revenue compared to the same period last year. Five9's management has raised the fourth-quarter revenue guidance by $6 million, indicating a potential year-over-year revenue increase of 12%.
In addition to financial performance, the company completed the acquisition of Acqueon, which is expected to expand its product portfolio and market reach. DA Davidson, an analyst firm, has shown confidence in Five9's growth by raising the company's price target to $45.00 from the previous $40.00, while maintaining a Neutral rating.
The company also announced an executive team change, with Daniel Burkland transitioning to the role of Executive Vice President, Go-to-Market Strategy. These developments highlight Five9's ongoing efforts to refine its leadership structure and drive growth in the competitive cloud-based contact center market.
InvestingPro Insights
The recent positive developments for Five9, Inc. (NASDAQ:FIVN) are further supported by real-time data and insights from InvestingPro. Despite the company not being profitable over the last twelve months, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will be profitable this year. This aligns with the reacceleration in key lead metrics and the credibility of Five9's FY25 guidance mentioned in the article.
InvestingPro data shows that Five9's revenue growth remains strong, with a 14.18% increase in the last twelve months as of Q2 2024, reaching $968.26 million. The company's gross profit margin stands at a healthy 52.85%, indicating efficient cost management. These figures support the market's positive reaction to Five9's earnings report and Piper Sandler's increased price target.
It's worth noting that while the stock has taken a significant hit over the last six months, with a -39.6% price total return, it has shown a strong return of 17.14% over the last month. This recent uptick could be indicative of the market's renewed confidence in Five9's prospects, as highlighted in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 10 additional InvestingPro Tips available for Five9, providing a deeper understanding of the company's financial health and market position.
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