Five9, Inc. FIVN is scheduled to report third-quarter 2017 results after the closing bell on Nov 8. Last quarter, the company witnessed a positive earnings surprise of 100%. Five9 beat earnings estimates in the trailing four quarters, with a negative positive surprise of 100%.
Expect What?
The current Zacks Consensus Estimate for the quarter under review is pegged at a loss of 1 cent compared with in-line earnings in the year-ago period. The earnings estimate has remained stable in the last 30 days. Further, analysts polled by Zacks expect revenues of $48 million, up roughly 17.1% from the year-ago quarter.
Let's see how things are shaping up for this announcement.
Factors Influencing Q3 Results
The company reported better-than-expected second-quarter results, wherein both the top and bottom line fared better than Zacks Consensus Estimate. Buoyed by stellar results of the quarter, the company also upped fiscal 2017 guidance.
Revenues for fiscal 2017 are now expected to be in the range of $193.5-$195.5 million, up from the earlier guidance range of $190.6-$193.6 million. Non-GAAP earnings per share are now anticipated in the range of break-even to 3 cents, better than the earlier guided range of a loss of 5 cents per share to earnings of a penny.
Five9 offers a virtual contact center cloud platform that acts as a hub for interaction between clients and customers. The company has strong partnerships with industry leaders such as Salesforce, Oracle, Zendesk, and Microsoft MSFT Dynamics 365. The partnerships will enable Five9 to offer customers greater flexibility, enhanced experience and cloud-based solution. This is likely to generate incremental revenues through higher customer reach.
The cloud-based contact center solution industry has been witnessing growth over the past several quarters as organizations are looking for ways to minimize costs and improve customer support. We believe that Five9’s cloud contact center software along with ongoing execution puts Five9 in a great position to capitalize on this opportunity. Consequently, this should reflect in its to-be-reported quarter.
Moreover, the company’s consistent focus on expanding its product portfolio will aid the top-line performance.
What the Zacks Model Unveils?
Zacks ESP: Five9 currently has an Earnings ESP of +200%. This is because the Most Accurate estimate is pegged at 1 cent, while the Zacks Consensus Estimate is at a loss of 1 cent. A favorable Earnings ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Five9 currently carries a Zacks Rank #3 (Hold). It should be noted that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, stocks with a Zacks Rank #4 or 5 (Sell rated) should never be considered going into an earnings announcement.
The combination of Five9’s Zacks Rank #3 and a positive ESP make us reasonably confident of a positive earnings beat.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
NVIDIA Corporation NVDA has an Earnings ESP of +1.60% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
DISH Network Corporation DISH has an Earnings ESP of +1.68% and a Zacks Rank #3.
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