'Buying' Opportunity In Five9 Stock After Zoom Deal Fallout: Why Analyst Sees 25% Upside

KeyBanc analyst Michael Turits sees Five9 Inc FIVN as one of the best-positioned names in the communications-software space.

The Five9 Analyst: Turits upgraded the firm’s rating from sector weight to overweight and issued a price target of $200, an upside of about 25% to latest market price.

The Five9 Thesis: The Keybank upgrade came on the back of VAR survey data and discussions with channel partners.

“We see FIVN as one of the best positioned names in communications software with VARs

reporting a 12pt improvement in FIVN activity in the quarter, rising to the second-best performing CC vendor vs. fifth last [quarter].”

Turits wrote that the contact center remains a “central point of ongoing enterprise customer experience initiatives, and we see FIVN benefiting from this multi-year undertaking with partners seeing resilient demand for CCaaS [Contact Center as a Service] upgrades.”

KeyBanc raised FY22 revenue estimate to $721 million from $705 million and earnings per share to $1.35 from $1.33 “on continuing CCaaS adoption trends.”

See Also: Morgan Stanley Sees Attractive Entry Point At Five9's Current Valuation, Sees Huge Upside

Turits termed the near-term disruption from the failed Zoom Video Communications Inc ZM and Five9 merger as a “buying” opportunity.

Five9 is scheduled to report earnings on Nov. 8. As per the company’s Q2 numbers, earnings per share came in at $0.23, which beat the Street estimate of $0.14.

Five9 Price Action: On Monday, Five9 shares closed nearly 0.5% lower at $160.64.

Read Next: Zoom's $14.7B Deal To Acquire Five9 Falls Through