What Happened?
Shares of cloud contact center software provider Five9 (NASDAQ: FIVN) fell 3.2% in the morning session after an analyst at Barclays lowered the company's price target, which overshadowed positive partnership news.
The previous day, Barclays analyst Raimo Lenschow cut the firm's price target on the stock to $25 from $29. While the firm kept its "Overweight" rating, the nearly 14% reduction in the price target signaled a more cautious view of the company's future stock performance. This analyst action seemed to weigh on the stock more heavily than a separate announcement that Five9 expanded its partnership with Google Cloud. The company disclosed a new joint AI solution to help large businesses improve their customer service, but the news was not enough to overcome the negative sentiment from the price target cut.
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What Is The Market Telling Us
Five9’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 8.5% on the news that the company issued a disappointing revenue forecast for the next quarter, which overshadowed its otherwise solid third-quarter results. While Five9 met Wall Street's revenue expectations for the third quarter with an 8.2% year-on-year increase to $285.8 million and beat profit estimates, its guidance for the next quarter fell short. The company's forecast of $297.7 million was about 0.8% below what analysts had estimated, raising concerns about future growth. Adding to the negative sentiment, analyst James Fish from Piper Sandler reportedly reduced the price target for the stock to $26.00 from $31.00, though the firm maintained its 'Overweight' rating. The market's reaction suggested that the weaker outlook outweighed the positive aspects of the report, which included an earnings beat for the quarter and raised full-year profit guidance.
Five9 is flat since the beginning of the year, and at $18.93 per share, it is trading 55.8% below its 52-week high of $42.82 from February 2025. Investors who bought $1,000 worth of Five9’s shares 5 years ago would now be looking at an investment worth $108.96.
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