Rosenblatt has revised its price forecast for Five9 (FIVN, Financial), lowering the target to $36 from the previous $58 while maintaining a Buy rating. This decision stems from revised revenue expectations for the fiscal years 2025 and 2026, influenced by persistent macroeconomic uncertainties and the impact of tariffs on the company's valuation.
The adjustment also considers recent operational changes, notably a 4% workforce reduction, impacting projections for operating margins and pro forma earnings per share (EPS) for FY25. These updates come as Five9 prepares to disclose its first-quarter results on Thursday, May 1.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Five9 Inc (FIVN, Financial) is $47.55 with a high estimate of $67.00 and a low estimate of $28.00. The average target implies an upside of 105.05% from the current price of $23.19. More detailed estimate data can be found on the Five9 Inc (FIVN) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Five9 Inc's (FIVN, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Five9 Inc (FIVN, Financial) in one year is $92.82, suggesting a upside of 300.26% from the current price of $23.19. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Five9 Inc (FIVN) Summary page.
FIVN Key Business Developments
Release Date: February 20, 2025
- Annual Revenue: Exceeded $1 billion.
- Q4 Revenue Growth: 17% year-over-year.
- Subscription Revenue Growth: 19% year-over-year in Q4.
- Adjusted EBITDA Margin: 23% in Q4.
- Operating Cash Flow: $50 million, or 18% of revenue in Q4.
- Free Cash Flow: $33 million, or 12% of revenue in Q4.
- Enterprise AI Revenue Growth: 46% year-over-year in Q4.
- Adjusted Gross Margin: 63.5% in Q4, up 220 basis points year-over-year.
- GAAP Net Income: $11.6 million in Q4.
- Non-GAAP EPS: $0.79 per diluted share in Q4, up $0.18 year-over-year.
- 2024 Revenue Growth: 14.4% year-over-year.
- 2024 Adjusted Gross Margin: 61.7%, up 70 basis points year-over-year.
- 2024 Non-GAAP EPS: $2.47, up $0.42 per diluted share year-over-year.
- LTM Operating Cash Flow: $143 million, or 14% of revenue.
- LTM Free Cash Flow: $79 million, or 8% of revenue.
- 2025 Revenue Guidance: Midpoint of $1.14 billion.
- 2025 Non-GAAP EPS Guidance: Midpoint of $2.60 per diluted share.
- Q1 2025 Revenue Guidance: Midpoint of $272 million.
- Q1 2025 Non-GAAP EPS Guidance: $0.48 per diluted share at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Five9 Inc (FIVN, Financial) reported annual revenue exceeding $1 billion, driven by a 17% year-over-year growth in fourth-quarter revenue.
- The company's subscription revenue grew by 19% year-over-year, contributing significantly to the overall revenue increase.
- Five9 Inc (FIVN) achieved a record adjusted EBITDA margin of 23% in the fourth quarter, indicating strong profitability.
- Enterprise AI revenue growth accelerated to 46% in the fourth quarter, showcasing the company's leadership in AI for customer experience.
- The company has strong partnerships with major players like Salesforce, ServiceNow, Microsoft, Verint, and Google, enhancing its market position and growth potential.
Negative Points
- Five9 Inc (FIVN) faces substantial risks and uncertainties, including macroeconomic challenges such as inflation, high interest rates, and currency fluctuations.
- The company acknowledged the potential impact of adverse economic conditions on its future results, which could affect growth projections.
- There is uncertainty regarding consumer spending, which could impact Five9 Inc (FIVN)'s revenue from usage-based services.
- The CFO transition may introduce some uncertainty, as Barry Zwarenstein is retiring, and Brian Lee is stepping in as Interim CFO.
- Five9 Inc (FIVN) noted that the seat count metric is becoming less relevant, indicating a shift in how the company measures performance, which may require investors to adjust their evaluation criteria.
