Five9's Hit Second Best Quarterly Bookings Ever Amid Challenging Macros, Analyst Still Remains Conservative With No Price Target Hike

Five9's Hit Second Best Quarterly Bookings Ever Amid Challenging Macros, Analyst Still Remains Conservative With No Price Target Hike
  • Needham analyst Scott Berg acknowledged Five9, Inc's FIVN solid 2Q results highlighted by its second strongest bookings quarter to date. 
  • While FIVN did not have a repeat mega-deal as in 1Q, the bookings strength was broad-based, with higher customer demand for Contact Center automation solutions now comprising 10% of bookings driving incremental upside, he noted. 
  • On the positive side, besides top-level bookings, gross margins have appeared to trough as the company gained leverage from its PS hires, and partner contribution increased 52% Y/Y, which he viewed as a strong signal that its product strategy resonated well. 
  • On the cautious side, the revenue outperformance was lower than 2Q in FY19 or FY20, with some modest sales cycle extensions. 
  • He viewed the 2H guidance as fairly de-risking this impact, given the company's strong bookings to revenue conversion visibility.
  • Berg reiterated a Buy with a price target of $160.
  • Price Action: FIVN shares traded higher by 9.11% at $107.34 on the last check Friday.
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