GET DAILY SIGNALSWhy Is Five9 (FIVN) Stock Down -17.37% Today?
Key Takeaways
- Shares of Five9 fell roughly 17.37% in Friday's session, trading near $28.21 versus a prior close of $34.14.
- Primary catalyst: Disappointing fourth-quarter and full-year earnings guidance overshadowed an otherwise solid third-quarter earnings beat.
- Secondary drivers: Margin compression, higher-than-expected share count, and near-term dilution concerns tied to the pending Level AI acquisition.
- Broader context: The decline diverged from a relatively steady software sector, making this largely a company-specific, guidance-driven selloff.
- What traders are watching: Fourth-quarter execution, AI revenue momentum, and the timing and integration of the Level AI deal.
- For additional details on this company's valuation, historical performance, and analyst expectations, explore Price Targets, Earnings, and Forecast pages.
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Opening Summary
FIVN, the cloud-based contact center software provider Five9, Inc., saw its shares plunge in Friday's trading session after the company issued fourth-quarter and full-year profit guidance that fell short of Wall Street expectations. The stock dropped approximately 17.37%, trading near $28.21, down from a prior closing price of $34.14. The selloff came despite a third-quarter earnings beat, as investors focused squarely on a weaker profitability outlook and softer near-term margin trajectory.
Earnings Results and Guidance
Five9 reported adjusted earnings of $0.82 per share for the third quarter, narrowly topping the consensus estimate of $0.80. Revenue rose 13% year over year to $323.3 million, ahead of the roughly $319 million analysts had projected, with subscription revenue climbing 16%. Adjusted EBITDA increased to $81.2 million from $71.7 million a year earlier.
However, the forward-looking picture disappointed investors. For the fourth quarter, management guided adjusted earnings per share to a range of $0.88 to $0.92, well below the consensus estimate of approximately $0.99. Revenue guidance of $328 million to $334 million was roughly in line with expectations. The company also trimmed its full-year 2026 adjusted EPS outlook to $3.17 to $3.21, down from a prior range of $3.22 to $3.30. This downward revision in profitability expectations was the central driver behind the sharp market reaction.
Margin Pressure and Rising Share Count
Beyond headline guidance, the quarter revealed a few underlying pressures. GAAP gross margin declined to 53.4% from 55.0% a year earlier, while adjusted gross margin slipped to 61.7% from 62.8%, which management attributed partly to timing-related partner costs. The company also cited a higher-than-expected share price contributing to an elevated diluted share count, further pressuring per-share figures. A planned cost and organizational-design initiative was pushed from late 2026 into early 2027, extending the timeline for anticipated margin improvements.
Level AI Acquisition
Five9 announced a definitive agreement to acquire Level AI, an AI-native customer experience platform, for approximately $325 million in cash. While strategically aimed at expanding Five9's ability to sell standalone AI products into enterprises using other contact center platforms, the deal is expected to dilute adjusted EBITDA margin in 2027 by roughly a point, with accretion not expected until 2028. The guidance provided does not include any contribution from the acquisition, and the combination added near-term uncertainty for investors already focused on profitability.
Market Context and Trading Activity
The decline in FIVN shares was driven primarily by company-specific fundamentals rather than broad sector weakness. The stock's move reflected elevated volume as investors repositioned following the earnings release, with the guidance miss triggering a decisive break below prior support levels. The magnitude of the drop underscored how heavily the market had priced in continued earnings momentum, leaving little room for a softer profit outlook even amid accelerating AI revenue growth, which jumped 91% year over year to roughly $45 million.
What Comes Next for FIVN
Looking ahead, investors will monitor whether Five9 can sustain its accelerating subscription and AI revenue growth while stabilizing margins. The company raised its full-year AI revenue growth expectation to at least 75%, up from at least 60%, signaling confidence in its core growth engine. Key watch items include the timing and integration of the Level AI acquisition, fourth-quarter execution against the reduced profit guidance, and management's ability to manage difficult year-over-year comparisons flagged for 2027. Risks remain tied to competitive pressures in the contact center software market and the pace at which margin improvements materialize.
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FIVN sees MACD Histogram just turned negative
FIVN saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on November 03, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 47 instances where the indicator turned negative. In 43 of the 47 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 05, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on FIVN as a result. In 69 of 81 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 85%.
FIVN moved below its 50-day moving average on November 05, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for FIVN crossed bearishly below the 50-day moving average on November 10, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 13 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 87%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FIVN declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 80%.
The Aroon Indicator for FIVN entered a downward trend on October 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +7.52% 3-day Advance, the price is estimated to grow further. Considering data from situations where FIVN advanced for three days, in 204 of 289 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
FIVN may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 58 (best 1 - 100 worst), indicating steady price growth. FIVN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 62 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.677) is normal, around the industry mean (16.272). P/E Ratio (36.051) is within average values for comparable stocks, (52.956). Projected Growth (PEG Ratio) (0.261) is also within normal values, averaging (3.648). Dividend Yield (0.000) settles around the average of (0.430) among similar stocks. P/S Ratio (2.447) is also within normal values, averaging (103.889).
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 76 (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 82 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FIVN’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.
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General Information
a provider of cloud contact center software solutions
Industry ComputerCommunications