Back to top

Image: Bigstock

Five9, Inc. (FIVN) Hits Fresh High: Is There Still Room to Run?

Read MoreHide Full Article

A strong stock as of late has been Five9 (FIVN - Free Report) . Shares have been marching higher, with the stock up 12.9% over the past month. The stock hit a new 52-week high of $37.13 in the previous session. Five9 has gained 84.6% since the start of the year compared to the 22.8% gain for the Zacks Computer and Technology sector and the 8.6% return for the Zacks Internet - Software industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 6, 2026, Five9 reported EPS of $0.7 versus consensus estimate of $0.68.

For the current fiscal year, Five9 is expected to post earnings of $3.25 per share on $1.27 in revenues. This represents a 9.8% change in EPS on a 10.27% change in revenues. For the next fiscal year, the company is expected to earn $3.78 per share on $1.39 in revenues. This represents a year-over-year change of 16.21% and 9.96%, respectively.

Valuation Metrics

While Five9 has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Five9 has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 11.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 11.4X versus its peer group's average of 19.7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Five9 currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Five9 fits the bill. Thus, it seems as though Five9 shares could have potential in the weeks and months to come.

How Does FIVN Stack Up to the Competition?

Shares of FIVN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is PubMatic, Inc. (PUBM - Free Report) . PUBM has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of D.

Earnings were strong last quarter. PubMatic, Inc. beat our consensus estimate by 300.00%, and for the current fiscal year, PUBM is expected to post earnings of $0.50 per share on revenue of $303.85 million.

Shares of PubMatic, Inc. have gained 9.3% over the past month, and currently trade at a forward P/E of 35.76X and a P/CF of 29.43X.

The Internet - Software industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for FIVN and PUBM, even beyond their own solid fundamental situation.

Published in