A Fresh Look at Five9 (FIVN) Valuation Following Its New AI-Powered ServiceNow Integration

Five9 (FIVN) just unveiled Five9 Fusion for ServiceNow, a significant advancement for contact center and customer service technology. This new AI-powered integration consolidates voice and digital interactions into a single, unified workflow within the ServiceNow platform. For investors observing how businesses transform their customer experience strategies, this development stands out not only for its technical capabilities but also as a response to an ongoing industry challenge: fragmented tools that slow down agents and reduce customer satisfaction. In this context, Five9’s stock has struggled to gain positive momentum this year. Shares have fallen nearly 35% year to date and are down around 5% over the past year, reflecting cautious market sentiment even as the company introduces features like real-time transcription and unified AI routing. With the multi-year partnership with ServiceNow deepening and new AI-enhanced features launching, some investors are starting to question whether recent weakness is masking the longer-term potential. After a year like this, is the market missing an opportunity here, or is it already factoring in all the future growth that Five9’s latest moves may hold?

Most Popular Narrative: 27.2% Undervalued

According to the most widely followed narrative, Five9 is currently seen as significantly undervalued relative to its future growth and profit potential, based on analyst consensus projections and a discount rate of 9.6%.

Ongoing large customer wins and multi-year contract expansions that emphasize Five9 as a single, comprehensive CX platform for both core and AI solutions demonstrate sustained demand for scalable, cloud-native contact center offerings. This supports continued enterprise revenue growth and improved dollar-based net retention rates.

Want to uncover why analysts are still so bullish on Five9 despite this year’s weak share performance? The narrative’s hidden story is all about aggressive growth assumptions, margin expansion, and a bet on rising contract values. Wondering what mix of product momentum and profitability upgrades is fueling this bold fair value? The answer could surprise even the most seasoned investors.

Result: Fair Value of $36.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing executive transitions and rising competition could threaten Five9’s growth prospects if leadership shifts disrupt operations or if rivals accelerate innovation.

Find out about the key risks to this Five9 narrative.

Another View: SWS DCF Model Result

While analysts see upside based on future growth, our DCF model also indicates the current share price is well below fair value. However, can any model fully capture the uncertainty around future profitability and technology shifts?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Five9 for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Five9 Narrative

If this perspective does not align with your own, or if you prefer to dig deeper into the numbers yourself, you can shape your own narrative in just a few minutes. Do it your way

A great starting point for your Five9 research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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