Five9 stock prediction as it guides Q4 and FY2021 results above expectations

By: Motiur Rahman
Motiur Rahman
Md Motiur is a Financial Analyst at Invezz covering the North American, European and Asian stock markets. He has… read more.
on Nov 9, 2021
  • Five9 shares on Tuesday rallied 15% after reporting solid fiscal third-quarter results.
  • The company announced its most recent quarterly results Monday after markets closed, beating expectations.
  • Five9 also issued fiscal Q4 and FY2021 results above the consensus Street forecasts.

On Monday, Five9 Inc. (NASDAQ:FIVN) shares skyrocketed 15% after announcing its most recent quarterly results. The company reported its fiscal third-quarter revenue and earnings Monday after markets closed, beating the consensus for analyst expectations. Five9 also issued FQ4 and FY2021 revenue and earnings guidance above Street forecasts.

The company posted FQ3 non-GAAP earnings per share of $0.28 outperformed the consensus analyst expectation of $0.23. On the other hand, its GAAP EPS of -$0.30 missed the average estimate of -$0.22, while revenue for the quarter surged by 37.6% from the same quarter in 2020 to $154.3 million, $7.62 million ahead of estimates.

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The company also issued FQ4 and FY2021 revenue guidance in the range of $164.5 million to $165.5 million and $600.5 million and $601.5 million, respectively surpassing the Street forecast of $146.68 million and $684.89 million.

In addition, its EPS guidance of $0.36-$0.37 and $1.09-$1.10, for FQ4 and FY2021, respectively, was ahead of the average analyst estimate of $0.23 and $1.02.

Time to bet on growth?

From an investment perspective, Five9 shares trade at a steep forward P/E ratio of 108.7, making it too expensive for value investors.

However, given its average earnings growth expectation of about 30% per year over the next five years, the stock could be an attractive option for long-term investors.

Source – TradingView

Technically, Five9 shares seem to be trading within a descending channel formation in the intraday chart. However, Tuesday’s spike pushed the stock price closer to the trendline resistance creating an opportunity for a breakout.

Therefore, investors could target extended gains at about $174.73, or higher at $186.11, while $152.10 and $140.31 are support levels.

It may not be too late to buy

In summary, although Five9 shares spiked 15% on Tuesday, the stock is still down more than 5% this year.

In addition, the stock is yet to reach overbought conditions, thus leaving room for more upward movements.

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