Zacks Investment Ideas feature highlights: Five9 and Zoom

For Immediate ReleaseChicago, IL – December 16, 2024 – Today, Zacks Investment Ideas feature highlights Five9, Inc. FIVN and Zoom ZM.Tech Stocks for 2025: Buy FIVN Down 80% for AI-Boost Upside?Five9, Inc. stock has tanked 80% from its summer 2021 peaks, driven by rising interest rates that saw Wall Street dump stocks trade at massive premiums to future earnings. Five9 shareholders also rejected Zoom’s attempted deal to buy the firm in September 2021.Five9 stock remained on a downward trajectory until this fall. The provider of cloud software for contact centers has soared 40% since early November, fueled by its solid beat-and-raise quarter.Five9’s artificial intelligence-boosted features are driving results, and its recent upward earnings revisions land it a Zacks Rank #1 (Strong Buy).FIVN has crushed the Zacks Tech sector over the last 10 years, up 845% vs. 340%, even though it trades 80% below its all-time highs. Therefore, investors looking for tech stocks with big upside might want to buy Five9 stock in 2025.Why Five9 Stock Could Be a 2025 Tech WinnerFive9 was at the vanguard of cloud software solutions for contact centers. Five9’s easy-to-use applications help its clients improve customer interactions across voice, chat, email, web, social media, and mobile. Five9’s goal is to help transform contact centers for the modern world where customers expect a streamlined, customized experience across every possible communication platform around the clock.Five9 has adapted to the AI arms race, rolling out its Intelligent CX Platform. Five9’s AI-enhanced offerings enable its clients to “deliver AI-driven, hyper-personalized, seamless experiences at every stage of the customer journey.”Five9 aims to empower customer service agents to take care of whatever the customer needs as efficiently as possible, while also becoming more proactive and personalized.FIVN grew its subscription revenue by 20% in Q3, with total revenue up 15%. Five9 posted an adjusted EBITDA margin of 20%, helping it produce an operating cash flow of $41 million.Five9 raised its outlook when it reported on November 7, with its positive EPS revisions earning it a Zacks Rank #1 (Strong Buy). “We are energized by the momentum we are seeing with our AI products and believe that the market opportunity ahead is stronger than ever,” CEO Mike Burkland said in prepared remarks.Five9 is projected to grow its adjusted earnings by 15% in 2024 and 8% next year. FIVN has beaten our bottom-line estimates by an average of 22% in the trailing four quarters. The customer service tech firm is expected to grow its sales by 13% and 10.5%, respectively to reach $1.14 billion in 2025—up from $435 million in 2020.Is Five9 Stock Set to Soar in 2025?FIVN stock has soared 845% in the 10 years to blow away the Zacks Tech sector’s 340%. Yet the stock is down 35% in the last five years. Five9 stock trades 80% below its August 2021 peak, which it reached shortly after Zoom announced it was set to acquire FIVN in an all-stock transaction valuing Five9 at $14.7 billion.Fast forward a few months to September 2021 and the companies terminated the deal by mutual agreement after it failed to receive the requisite number of votes from Five9 shareholders. Five9’s current market cap sits at $3.2 billion with the stock down 45% in 2024.FIVN is flashing signs of life, having surged 50% in the past three months and 35% since its Q3 release in early November.Five9 trades 19% below its average Zacks price target and it’s attempting to retake its 50-week moving average.FIVN trades at 2.9X forward 12-month sales, marking a 55% discount to Tech and 50% value vs. its 10-year median. Five9’s forward earnings multiple remains sky-high and is a big part of the reason for its tumble and massive underperformance over the last several years.If Five9 can slowly improve its bottom line through its AI efforts then it could be a long-term winner.Wall Street might start nibbling at the stock even at its valuation levels. Plus, 12 of the 19 brokerage recommendations Zacks has for the cloud contact center software stock are “Strong Buys,” alongside two “Buys” and zero sells.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five9, Inc. (FIVN): Free Stock Analysis Report Zoom Communications, Inc. (ZM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks