Shares of Five9 Inc. FIVN hit a new 52-week high of $7.41 on Dec 10. The stock closed at $7.38, representing a year-to-date return of 64.4%. The average trading volume for the last three months aggregated approximately 265K.
An impressive track record of exceeding the quarterly bottom-line expectations in addition to the encouraging fourth-quarter guidance and an upbeat outlook for full-year 2015 drove the shares higher.
Five9 has surpassed the Zacks Consensus Estimate in the preceding four quarters with an average surprise of 25.35%.
Last month, Five9 reported better-than-expected third-quarter 2015 results. Though the company reported loss per share of 12 cents, it fared better than the Zacks Consensus Estimate of a loss of 17 cents. Revenues not only increased roughly 25% year over year to $32.3 million but also beat the Zacks Consensus Estimate of $30 million.
Over the last 60 days, 1 out of 2 estimates were revised upward for the current quarter as well as the full year. The Zacks Consensus Estimate for the current quarter improved to a loss of 12 cents per share from 14 cents loss and that for full-year 2015 it is now pegged at a loss of 54 cents compared with earlier projection of a loss of 61 cents.
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 as well as 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 benefit the company over the long run.
Furthermore, the company’s sustained focus on expanding its product portfolio will boost the top line.
However, intensifying competition from small and large players, such as Cisco Systems CSCO, remains the concern.
Currently, Five9 carries a Zacks Rank #2 (Buy). A couple of other stocks worth considering in the broader technology sector are Cvent Inc. CVT and Paylocity Holding Corp. PCTY, both sporting a Zacks Rank #1 (Strong Buy).
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