Five9 4Q Pops 10% Pre-Market On Blowout Quarter

Shares of Five9 climbed 10.3% in pre-market trading on Feb. 23 after the cloud software provider reported fourth-quarter non-GAAP earnings per diluted share of $0.34 that topped analysts’ estimates of $0.23. Revenues in 4Q came in at $127.9 million, up by 39% year-on-year, beating consensus estimates of $115.3 million.

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Five9 (FIVN) CEO Rowan Trollope said, “Our outstanding fourth quarter results capped a tremendous year for Five9…We delivered fourth quarter revenue of $127.9 million, accelerating 39% year-over-year and 14% sequentially, both all-time highs, and Adjusted EBITDA margin was a record 22.8%…Our results were driven by continued exceptional execution, new product innovation, including AI-powered automation technologies, and portfolio expansion along with international traction and positive market tailwinds.”

In the first quarter of FY21, FIVN expects to report revenues in the range of $122 million to $123 million. Non-GAAP net income per diluted share is forecasted to land between $0.12 to $0.14. For FY21, the company projected revenues in the range of $518.5 to $521.5 million with a non-GAAP net loss of $0.92 to $0.88 per basic share. (See Five9 stock analysis on TipRanks)

Following the earnings announcement, Rosenblatt Securities analyst Ryan Koontz raised the stock’s price target from $205 to $215 and reiterated a Buy rating. Koontz said, “Enterprise sales, powered by the company’s global SI [system integration] partners and channels, drove the majority of Q4 growth accelerating LTM [last twelve months] revenue from 35% to 39% y/y.”

“On the product front, we suspect a larger gap is developing between FIVN products and its CCaaS [contact center as a service] competitors in key areas such as automation, while a rising tide in digital transformation and COVID WFx broadly lifts all boats,” the analyst added.

Overall, analysts are bullish on the stock with a Strong Buy consensus rating. That’s based on 7 analysts recommending a Buy and 1 analyst suggesting a Hold. The average analyst price target of $196 implies 17.5% upside potential to current levels.