A Cautious 'Buy' - Analyst Lowers Five9 Target Despite Impressive Q1 Results

Needham analyst Scott Berg slashed the price forecast for Five9, Inc. FIVN from $52 to $40 while retaining a Buy rating.

On Thursday, the company reported first-quarter revenue growth of 13% year-on-year to $279.70 million, beating the analyst consensus estimate of $272.39 million. Adjusted EPS of $0.62 topped the analyst consensus estimate of $0.48.

Five9 expects second-quarter revenue of $274.5 million-$275.5 million (versus analyst consensus estimate of $275.22 million) and adjusted EPS of $0.64-$0.66 versus analyst consensus estimate of $0.56.

The analyst writes that Five9 reported strong results, countering a short narrative of slowing deals.

Also Read: This Five9 Analyst Slashes Forecasts Ahead Of Q1 Results

Positive sales commentary included the best install base growth in three years, with some large deals slipping (one signed in the second quarter), adds the analyst.

Berg notes that strong growth in AI booking and enterprise AI revenues remained a tailwind.

Also, the analyst writes that he sees potential upside beyond this from increased AI adoption driven by product and GTM investments.

Berg added that updated guidance indicates subscription revenue growth likely bottoms in the first half and re-accelerates in the second half.

Price Action: FIVN shares are up 1.32% at $25.41 at the last check on Friday.

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