What Happened?
Shares of cloud contact center software provider Five9 (NASDAQ: FIVN) jumped 17.7% in the afternoon session after the company reported second-quarter results that surpassed Wall Street's expectations for both revenue and profit.
Five9 announced adjusted earnings of $0.70 per share on revenue of $312.4 million, beating analyst estimates. The company's revenue grew 10.3% year-over-year, reflecting healthy demand for its cloud-based platform. Looking ahead, management provided a solid outlook, raising its full-year revenue guidance to $1.27 billion at the midpoint and forecasting next quarter’s sales above consensus.
While the company reiterated its full-year profit guidance, investors clearly focused on the strong quarterly performance and positive sales trajectory, sending the stock higher.
The shares closed the day at $33.98, up 19.8% from the previous close.
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What Is The Market Telling Us
Five9’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. But moves this big are rare even for Five9 and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 5.7% on the news that the company was added to several S&P indices, including the S&P 1000 and S&P 600. This inclusion is a notable event because investment funds that track these benchmarks are now required to purchase Five9's stock. The resulting demand from these large institutional buyers can lead to a higher share price and increased trading volume. A company's addition to a major index is often seen by investors as a sign of its growing market presence and stability.
Five9 is up 81.5% since the beginning of the year, and at $34.14 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Five9’s shares 5 years ago would now be looking at only $170.34.
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