Five9, Inc. (NASDAQ:FIVN) Chief Financial Officer Barry Zwarenstein has sold shares of the company's common stock, according to a recent SEC filing. The transactions, which took place on September 10, 2024, involved a total sale of $118,892 worth of stock, with prices ranging from $26.91 to $27.43 per share.
The filings show that Zwarenstein sold 3,882 shares at an average price of $26.91, and an additional 526 shares at an average price of $27.43. The sales were part of a pre-established trading plan under Rule 10b5-1, which allows company insiders to set up a predetermined plan to sell stocks at a time when they are not in possession of material non-public information. This mechanism provides a defense against potential insider trading accusations.
According to the footnotes in the form, the sales were executed to cover taxes related to the vesting of restricted stock units, a common practice among executives. The detailed price ranges for the shares sold were $26.64 to $27.27 for the first tranche and $27.27 to $27.65 for the second, with the reported prices being weighted averages.
Following these transactions, the updated SEC filing indicates that Zwarenstein still holds a significant number of shares in direct ownership, with 101,732 shares remaining after the sales. Additionally, there is an indirect ownership of 85,121 shares held by a trust.
Investors often monitor insider sales as they may provide insights into an executive's view of the company's current valuation and future prospects. However, such sales do not necessarily indicate a lack of confidence in the company; they can also reflect personal financial management or diversification strategies.
Five9, Inc., headquartered in San Ramon, California, specializes in cloud software for contact centers and continues to be a notable player in the technology sector.
In other recent news, Five9 Inc . has achieved a significant milestone, surpassing an annual revenue run rate of over $1 billion in Q2. Despite a robust quarter, the company revised its annual revenue guidance downward by 3.8% due to customer budget constraints. Five9's adjusted EBITDA margin rose to 17% of revenue, contributing to a strong operating cash flow of $126 million.
Five9 also confirmed plans to reduce its global workforce by approximately 7% by the end of 2024, a strategic move projected to cost between $12 million and $15 million. This workforce reduction is seen as a step towards improving Five9's earnings and free cash flow for fiscal years 2025 and 2026.
The company also announced the acquisition of Acqueon, a firm specializing in proactive outbound omnichannel customer engagement, to expand its AI offerings. This move is expected to bolster Five9's growth and improve its strategic position in the digital shift in customer engagement practices.
Analyst firms Piper Sandler, Needham, and BTIG maintained their respective Overweight and Buy ratings on Five9, reflecting confidence in the company's future prospects amidst these developments. However, any guidance for fiscal year 2025 that is expected to be released next quarter is anticipated to be met with skepticism unless it is accompanied by significant outperformance.
InvestingPro Insights
As Five9, Inc. (NASDAQ:FIVN) experiences movement in insider transactions, with Chief Financial Officer Barry Zwarenstein's recent sale of company stock, it's crucial for investors to consider the broader financial health and market sentiment surrounding the company. According to InvestingPro data, Five9 currently has a market capitalization of approximately $2.08 billion, reflecting its standing in the market. Despite a challenging period, evidenced by a negative price-to-earnings (P/E) ratio over the last twelve months, which stands at -38.82, the company has shown resilience with a revenue growth of 14.18% during the same timeframe.
Adding to the context of the CFO's stock sale, InvestingPro Tips highlight some key points that may influence investor perception. Notably, analysts have revised their earnings upwards for the upcoming period, signaling potential optimism about Five9's financial trajectory. Furthermore, the company's liquid assets surpass its short-term obligations, providing a degree of financial stability. These insights suggest that while the stock has faced recent headwinds, as indicated by its presence in oversold territory according to the Relative Strength Index (RSI), there is a foundation for potential recovery.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips on Five9. As of now, there are 15 more tips available, which can provide deeper insights into the company's performance and expectations. These can be accessed by visiting the dedicated InvestingPro page for Five9 at: https://www.investing.com/pro/FIVN.
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