Five9 Inc. FIVN is set to report third-quarter 2015 results on Nov 3. Last quarter, the company posted a positive earnings surprise of 30.00%. Further, it is worth noting that the company has outperformed the Zacks Consensus Estimate in all the four trailing quarters with an average positive earnings surprise of 22.35%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Five9 offers virtual contact center cloud platform that acts as the hub for interaction between its clients and their customers. This facilitates contact center operations focused on inbound or outbound customer interactions within a single unified architecture. The company offers software products such as workforce management, speech recognition, predictive dialer and voice applications.
The cloud-based contact center solution industry is witnessing growth over the past several quarters as organizations are looking for ways to minimize costs and improve customer support. We believe that Five9 has been capitalizing on this opportunity which should be reflected in the to-be-reported quarter results.
Furthermore, the company’s sustained focus on expanding its product portfolio will boost the top-line performance.
However, intensifying competition from small and large players, such as Cisco Systems CSCO, is likely to affect Five9’s third-quarter performance.
Earnings Whispers
Our proven model does not conclusively show that Five9 is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: ESP for Five9 is 0.00% since the Most Accurate estimate of a loss of 17 cents per share is in line with the Zacks Consensus Estimate.
Zacks Rank: Five9’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of companies, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
CyberArk Software Ltd. CYBR, with an Earnings ESP of +10.00% and a Zacks Rank #2.
CDW Corp. CDW, with an Earnings ESP of +2.63% and a Zacks Rank #2.
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