What Do Five9’s Newly Added Risk Factors Reveal?

Five9 (FIVN) is a global provider of a scalable contact center platform based on AI cloud technology.

The firm recently announced better-than-expected third-quarter earnings, with top and bottom line data above Wall Street expectations. Strong growth in Enterprise subscription revenue, as well as overall business momentum, contributed to the company’s success.

Let’s have a look at what’s changed in the company’s risk factors that investors should know. (See Insiders’ Hot Stocks on TipRanks)

Five9 Risk Factors

According to the new Tipranks Risk Factors tool, Five9’s main risk category is Finance & Corporate, which accounts for 31% of the total 64 risks identified. The next two major risk factor contributors are Ability to Sell and Tech & Innovation, which stand at 19% and 17%, respectively.

Five9 has added one risk factor under the Production category.

Under the Employment / Personnel sub-category, the company said, “The new rule concerning mandatory COVID-19 vaccination of employees could have a material adverse effect on our business, financial condition, and results of operations.”

According to Five9, the Occupational Safety and Health Administration’s new regulation requiring firms with 100 or more employees to have a mandatory COVID-19 immunization program might lead to higher expenses and employee turnover. This might put the company’s finances in jeopardy.

On a brighter note, the overall sector average for the Finance & Corporate risk factor is 40.4%, higher than the average risks in that category for Five9.

Wall Street’s Take

Following the Q3 earnings announcement, Piper Sandler analyst James Fish reiterated a Buy rating on Five9 stock and a price target of $200. Five9’s new price target suggests 20.9% upside potential.

Fish is upbeat about the company’s prospects for the future. He writes, “The market remains strong and in Five9’s favor with its AI and automation focus platform. Positively, we saw execution against uncertainty, strong market dynamics, greater enterprise adoption (particularly with expansion deals) but yet a stable and +30% growing commercial business, and management has confidence in the next year.”

Consensus among analysts is a Strong Buy based on 14 Buy ratings and two Hold rating in the last three months. As for price targets, the average FIVN price target is $198.87, reflecting a potential 12-month upside of 20.2% from current levels.

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