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Five9 Collaborates With ServiceNow: Should Investors Buy the Stock?

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Five9 (FIVN - Free Report) shares have gained 20.6% in the past three months, outperforming the broader market, including the Zacks Internet – Software industry and the Technology Select Sector SPDR Fund (XLK - Free Report) ETF’s return of 14% and 6.5%, respectively. 

Five9’s outperformance reflects investors’ confidence in the company’s innovative portfolio. In a move to further enhance its product capabilities, FIVN has collaborated with ServiceNow (NOW - Free Report) to provide a comprehensive AI-powered solution for employee and customer experiences.

Integrating the capabilities of ServiceNow Customer Service Management with the Five9 platform will enhance both self-service and assisted service operations. This solution aims to unify customer support processes, reduce operational costs, increase agent efficiency, improve customer satisfaction and streamline contact center operations. The new AI-driven solution will enhance agent productivity through real-time transcription, unified routing and a centralized agent workspace.

 

Five9, Inc. Price and Consensus

Five9, Inc. Price and Consensus

Five9, Inc. price-consensus-chart | Five9, Inc. Quote

Strategic Partnerships to Boost FIVN’s Prospects

Five9 has been on the move to expand its collaborations with renowned companies by combining technologies, expertise and deep domain experience across segments. Earlier this year, the company collaborated with Salesforce (CRM - Free Report) , under which the two companies will focus on delivering joint AI-powered solutions to improve customer experiences (CX) in the contact center.

The latest release of Five9 for Service Cloud Voice integrates Salesforce Einstein with Five9’s AI solutions to enhance agent performance, improve contact center operations and enhance customer experience.

Five9 is also taking an inorganic route to expand its portfolio. In August 2024, the company acquired Acqueon, a leading real-time revenue execution platform. Incorporating Acqueon’s features into Five9’s Intelligent CX Platform is a significant advancement toward achieving Five9’s goal of becoming the adaptation engine for all interactions throughout the entire customer journey, encompassing marketing, e-commerce, sales and customer service.

AI Integration to Aid FIVN Growth

Five9 boasts a robust portfolio with Artificial Intelligence (AI) at its core to redefine end-to-end customer and employee satisfaction. The latest expansion of its Five9 Genius AI suite by FIVN with the launch of Five9 AI Agents, the next generation of Five9 Intelligent Virtual Agents that incorporates Generative AI is a notable development. 

Five9 AI Agents enable businesses to create chat and voice bots that blend human conversational skills with the quickness and vast knowledge of AI.

FIVN’s recent introduction of the Five9 Genius AI Suite, which includes a four-step process designed to deliver fully customizable, AI-enhanced CX throughout the customer journey is a significant development.

Five9 marks another remarkable development by revolutionizing the contact center industry with the launch of GenAI Studio, the first solution of its kind that empowers organizations to seamlessly customize off-the-shelf Generative AI models, such as OpenAI, with just a few clicks.

FIVN’s Q4 Guidance

The Zacks Consensus Estimate for the forthcoming quarter and 2024 depicts steady growth for Five9. For the fourth quarter of 2024, FIVN expects revenues to be $265.7 million, assuming muted ongoing seasonality. The Zacks Consensus Estimate for revenues is pegged at $267.5 million, indicating a year-over-year rise of 11.9%.

Non-GAAP earnings are expected to be 70 cents per share. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share, indicating a year-over-year rise of 13.1%.

For full-year 2024, FIVN expects revenues in the range of $1.015-$1.031 billion. The Zacks Consensus Estimate for revenues is pegged at $1.03 billion, indicating a year-over-year rise of 13.2%.

Non-GAAP earnings are expected in the band of $2.27-$2.37 per share. The Zacks Consensus Estimate for earnings is pegged at $2.35 per share, indicating a year-over-year rise of 14.6%.

Zacks Rank and Valuation

Considering Five9’s extensive product portfolio, along with its sustained focus on expanding the same through acquisitions and partnerships, the company’s prospect seems bright. Analysts’ projections further make FIVN stock a better investment option.

Additionally, Five9 has a favorable combination of Zacks Rank #1 (Strong Buy) and a VGM Score of B. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a VGM Score of A or B offer solid investment opportunities. 

Considering its impressive growth profile and attractive Zacks Style Score, we believe it is the right time to invest in the stock.

FIVN has a favorable Zacks Rank and a stretched valuation, implying investors should accumulate the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

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