Five9, the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst David Hynes from Canaccord Genuity maintained a Buy rating on the stock and has a $40.00 price target.
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David Hynes has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for Five9. Despite a slower growth rate in Q3, with revenue only reaching the high-end of management’s guidance, the company has shown significant progress in other areas. Notably, Five9 achieved an 80% growth in enterprise AI bookings and a 41% increase in enterprise AI revenue for the quarter. Additionally, the company set a new record for $1M+ new bookings, marking the highest in two years, and achieved consecutive records in installed base bookings.
However, the path to faster revenue growth is delayed, primarily due to ongoing challenges in the commercial segment and the nature of back-to-base business, which requires extended implementation periods before revenue recognition. Despite these hurdles, Hynes believes that Five9’s focus on margin expansion and the new $150M buyback program are positive steps. With the stock trading at a favorable valuation, Hynes sees potential for improved operating metrics in the future, justifying the Buy rating.
According to TipRanks, Hynes is an analyst with an average return of -6.1% and a 38.96% success rate. Hynes covers the Technology sector, focusing on stocks such as Atlassian, Workday, and HubSpot.