Truist Securities increased its price target on Five9 to $40 from $35 while maintaining a Buy rating, citing progress in the company's artificial intelligence strategy.
The upgrade follows a meeting between Truist analyst Terry Tillman and Five9's senior leadership to discuss the firm's AI roadmap. Five9 is positioning itself as a "humantic interaction layer," integrating human agents with AI-driven systems to enhance customer service operations.
Five9 reported adjusted earnings of $0.70 per share in the second quarter, exceeding the $0.68 forecast by Wall Street. Revenue totaled $312.4 million, up 10% year-over-year and surpassing expectations of $306.43 million. Subscription revenue grew 14% annually, while AI-related revenue surged 78% to approximately $39 million.
The stock was trading at $33.21 at the time of the report, near its 52-week high of $35.17. Over the past six months, shares have gained nearly 96%, reflecting strong investor confidence in the AI-driven growth narrative.
Other firms also adjusted their targets. Rosenblatt raised its price target to $32 from $29, maintaining a Buy rating, while DA Davidson lifted its target to $28 from $22 with a Neutral rating. Truist described Five9's valuation as "deep value," noting favorable risk-reward dynamics despite concerns about margin pressure in the contact center sector.
Five9's enterprise value-to-sales multiple is projected at 1.9 times for 2027, with an enterprise value-to-free cash flow multiple of 12.2 times. The company's free cash flow yield is estimated at 8% based on forward estimates.
