When Will Five9, Inc. (NASDAQ:FIVN) Turn A Profit?

Five9, Inc. (NASDAQ:FIVN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. With the latest financial year loss of US$82m and a trailing-twelve-month loss of US$53m, the US$2.3b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Five9's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Five9

According to the 22 industry analysts covering Five9, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$30m in 2026. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 58% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Five9 given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Five9 is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Five9 to cover in one brief article, but the key fundamentals for the company can all be found in one place – Five9's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Valuation: What is Five9 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Five9 is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Five9’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.