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Northland Initiates Outperform On Five9 Amid Accelerated Adoption Of SaaS Model

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  • Five9 Inc (NASDAQ: FIVN) shares have soared 120.54 percent over the past three months, rising almost to their 52-week high on December 29 at $8.95
  • Northland Capital’s Michael Latimore has initiated coverage of the company with an Outperform rating and a price target of $14.
  • The company has invested in its enterprise salesforce and to improve processes over the last two years, driving revenue growth acceleration and margin improvement.

Analyst Michael Latimore mentioned that contact center technologies enable effective and efficient customer interactions and can be delivered through an SaaS model.

However, migration to the SaaS model has taken longer for contact centers than other enterprise software because these businesses deal with real-time communications that are embedded in business processes.

“Concerns over security and reliability are largely mitigated now, leading to accelerated adoption of the SaaS model in our view,” Latimore noted.

The addressable market is estimated at about $20 billion, with estimated growth of 20-25 percent.

According to the Northland Capital report, “Five9 has improved its processes and platform over the past year, enabling it to capture larger and larger deals. Five9 built its platform from the ground up to offer multi-tenant contact center SaaS.”

Latimore expects the company to see 22 percent revenue growth in FY15, 18 percent in FY16 and 22 percent in FY17. The company’s enterprise growth, gross margins and EBITDA are also expected to improve through FY17.

Latest Ratings for FIVN

DateFirmActionFromTo
May 2021UBSInitiates Coverage OnBuy
Apr 2021Roth CapitalMaintainsNeutral
Apr 2021Canaccord GenuityMaintainsBuy

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Posted-In: Michael Latimore Northland Capital marketsAnalyst Color Long Ideas Initiation Analyst Ratings Trading Ideas

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