Five9 announced this morning that there would be a leadership change in house – and a big one. The CEO who has steered the company for the last 5 years will be leaving to pursue a new opportunity. However, where things get interesting is that his replacement isn’t new to leading Five9. Previous CEO Mike Burkland is back at the helm.
Burkland served as CEO from 2008 to 2017 – and oversaw tremendous growth during his decade-long tenure. He stepped aside for personal reasons as he was diagnosed with cancer – although he remained on the board as a chairman. Now, he’s been given a positive long-term outlook by his doctor and he’s ready to get back to work.
Obviously, leadership shuffling of this nature will manifest itself in stock movement – either positive or negative. And, you would think that Burkland’s return to Five9 would be well received by the market – but that has not been the case. Investors reacted by pushing FIVN stock down 20% so far this morning as a result of the news. This could be an overreaction. Or, is it truly taking a step backward? This remains to be seen.
It is worth noting, however, that Five9 stock did reach its pinnacle under the previous CEO – Rowan Trollope. The company reached a high of over $200/share in 2021 – and they’ve been sliding back down to earth ever since. With that said, it’s likely the spike FIVN stock saw was more of a pandemic bump than anything else.
However, the company also noted in a recent press release that Q3 earnings look to be ahead of projections. While the company estimated revenue in the range of $192.5 million, they are now projecting $198 million. Moreover, non-GAAP net income per share will be approximately $0.38 compared to estimations of $0.31 to $0.33 per share.
Now – all of this creates a unique situation for investors. The stock is down at its lowest point since 2019. Is this a good value buy at the current price of around $60 per share – or is this still not the bottom? If you’re currently invested in FIVN, should you continue holding out to see how the Q3 earnings conference on Nov 7, 2022, plays out – and how the new CEO guides the company?
If you’re wondering what your next play is with FIVN stock, keep reading – you’ve got to see what the VectorVest stock forecasting system is showing right now…
3 Red Flags for FIVN Stock Investors Need to See…
The VectorVest system simplifies trading by boiling down everything you need to know about a stock into three easy-to-use ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). They’re displayed on a scale of 0.00-2.00 – with the higher end of the range indicating higher performance.
Together, these three ratings make up the overall VST rating a stock is given – and from there, our system provides you with a clear buy, sell, or hold recommendation. That means you never have to let emotion or guesswork influence your decision-making again – you can rely on sound, tried-and-true financial analysis. So – what’s the case with FIVN?
- Overvalued with Poor Upside Potential: As of now, the current value VectorVest has calculated for FIVN is just $20/share – suggesting it’s way overvalued. Moreover, VectorVest’s RV rating of 0.79 for FIVN is poor. This means the long-term price appreciation potential for the stock is low.
- Fair Safety: The RS rating is an indicator of risk. It takes into account financial consistency and predictability, debt-to-equity ratio, and business longevity. As for FIVN, the RV rating of .91 is fair – just below the average of 1.00.
- Very Poor Timing: As you can see by looking at a graph of FIVN stock, it has a negative price trend in both the short and long-term windows. The RT rating for FIVN reflects this – as it sits at just 0.22, which is very poor. This rating is based on the direction, dynamics, and magnitude of the stock’s price movement in the short, mid, and long term.
All of this considered, FIVN has a poor VST rating of 0.68. So – is it time to sell? Or does this actually present a good opportunity for speculative investors to get into FIVN at a great value? To get a clear recommendation on your next move with this stock, you can analyze the stock for free here. You’re going to want to see this recommendation before you do anything else!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for FIVN, it is overvalued with poor upside potential, below-average safety, and very poor timing.
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