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Why Five9 Stock Jumped 20% in April

By Demitri Kalogeropoulos - May 10, 2021 at 8:45AM

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The software provider boosted its outlook after a strong first quarter.

What happened

Five9 (FIVN 0.87%) shareholders beat a booming market last month. Their stock jumped 20% in April compared to a 5.2% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.

The boost added to a big rally for the stock, which is up over 70% in the past 12 months.

A woman working in a call center.

Image source: Getty Images.

So what

Investors were thrilled with the cloud software provider's first-quarter earnings report, which was released on April 29. That announcement revealed a 45% sales increase along with solid profit gains. "Our first quarter results exceeded expectations across the board," CEO Rowan Trollope said in a press release.

Five9 credited progress in closing contracts with larger customers and a generally strong selling environment for customer call center platform.

Now what

Management raised its 2021 growth outlook and now sees sales reaching between $548 million and $551 million compared to the prior range of $519 million to $521 million. Net losses will be slightly lower than originally projected, too.

Those losses, and Five9's small sales base, might keep the stock price volatile for the time being, especially when a single postponed contract might have a significant impact on quarterly revenue. Yet shareholders should be happy to see the company gaining traction in its core niche while crafting a wider product portfolio.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Five9. The Motley Fool has a disclosure policy.

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