On Friday, Roth/MKM maintained a Buy rating on Five9, Inc. (NASDAQ:FIVN) stock with a steadfast price target of $90.00. The firm highlighted Five9's modest revenue beat in the first quarter of 2024, acknowledging the company's cautious stance on not raising guidance.
Despite this, the analyst pointed to the recent signing of Five9's largest deal to date, which is anticipated to grow to $50 million per year in annual recurring revenues.
The company's leading position in the Contact Center as a Service (CCaaS) market was underscored as a key strength. The analyst expressed confidence in Five9's growth prospects, particularly in the second half of 2024.
This optimism is based on a visible deployment backlog that is expected to drive a growth inflection, though they noted that macro-driven retention could introduce some uncertainty.
Roth/MKM anticipates that the company's performance in the latter half of the year will significantly boost investor sentiment. The analyst's reiteration of the Buy rating and price target reflects a belief in Five9's potential for strengthened performance as the year progresses.
InvestingPro Insights
Adding to the comprehensive analysis by Roth/MKM, InvestingPro data and tips provide further insight into Five9's financial health and market potential. With a market capitalization of $4.19 billion, Five9 is trading at a high Price / Book multiple of 7.79, which may reflect investor confidence in its assets despite not being profitable over the last twelve months. However, analysts expect net income growth this year, which could justify the current valuation and support the $90 price target set by Roth/MKM.
InvestingPro Tips highlight that Five9's liquid assets exceed its short-term obligations, indicating financial stability, and the company operates with a moderate level of debt, which is a positive sign for investors concerned about financial leverage. Additionally, the company's revenue has demonstrated a solid growth of over 15% in the last twelve months as of Q1 2024, which aligns with the analyst's optimism regarding Five9's growth prospects.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available, which could further inform investment decisions. To explore these tips and gain deeper insights into Five9's performance and potential, consider using coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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