Back to top

Image: Bigstock

What's in the Offing for Five9 (FIVN) This Earnings Season?

Read MoreHide Full Article

Five9, Inc. (FIVN - Free Report) is slated to release first-quarter 2018 results tomorrow. The company has a remarkable streak of beating earnings estimates. In fact, in each of the trailing four quarters, it surpassed the Zacks Consensus Estimate, coming up with an impressive average positive earnings surprise of 193.8%.

Let’s see how things are shaping up prior to this announcement.

What the Zacks Model Unveils?

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 at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

It should be noted that stocks with a Zacks Rank #4 or 5 (Sell rated) are best avoided, especially when the company is seeing negative estimate revisions.

Five9 carries a Zacks Rank of 3 and has an Earnings ESP of -26.3%, which makes surprise prediction difficult. Furthermore, we note that the Zacks Consensus Estimate remained unchanged over the past 30 days.

However, the company is likely to continue reporting top and bottom-line growth on a year-over-year basis. The Zacks Consensus Estimate for the first-quarter earnings is pegged at 3 cents, which indicates a massive improvement from the year-ago quarter’s breakeven earnings. Additionally, analysts polled by Zacks project revenues of roughly $55.1 million, up 17.2% from the year-ago quarter.

Five9, Inc. Price and EPS Surprise

 

Factors to Consider

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 (CRM - Free Report) , Oracle (ORCL - Free Report) , Zendesk, and Microsoft (MSFT - Free Report) . These partnerships have enabled it to offer greater flexibility, enhanced experience and cloud-based solutions to consumers. This is likely to have generated incremental revenues through higher customer reach.

It should be noted that the cloud-based contact-center solution industry has been witnessing growth for the past several quarters, as organizations are looking for ways to minimize costs and improve customer support. We believe Five9’s cloud contact-center software, along with the ongoing execution, places the company in a great position to capitalize on this opportunity. Consequently, this is anticipated to reflect in the to-be-reported quarterly results.

Moreover, the company’s continued focus on expanding its product portfolio is anticipated to have bolstered the top-line performance.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Published in