Five9, Inc. (FIVN) DCF Valuation & Fundamental Primer
Five9, Inc. (FIVN) currently trades at $55.60 with an enterprise value of $1.84B. Our proprietary institutional model rates Five9, Inc. at 43/100 (Grade: C · Capital Intensive / Low Margin). The current market price prices in an implied 5-year revenue CAGR of 43.6% vs. historical growth of 15.7% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Five9, Inc. (FIVN) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Five9, Inc. (FIVN) 3-Scenario DCF Valuation Range
Institutional Software Quality Scorecard (43/100 · Grade C)
Weak cash conversion, substantial dilution drag, or constrained financial flexibility.
Positive FCF but lower conversion efficiency due to capex or timing
Elevated equity dilution; SBC consumes substantial operating cash flow
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
Key Operational & Dilution Risks
- Substantial SBC dilution drag: SBC is 16.0% of revenue ($166.3M)
- Lower software gross margins (54.2%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into FIVN?
The current share price demands 43.6% 5-year CAGR—a +28.0% acceleration over historical run-rate (15.7%). Any growth slowdown risks valuation multiple contraction.
Five9, Inc. (FIVN) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $1.04B | $1.04B | $1.21B | $1.39B | $1.61B | $1.86B | $2.16B |
| Gross Profit | $564.4M | $564.4M | $652.8M | $755.0M | $873.3M | $1.01B | $1.17B |
| Operating Income (EBIT) | $-51.3M | $-51.3M | $-59.3M | $-68.6M | $-79.3M | $-91.7M | $-106.1M |
| Stock-Based Compensation (SBC) | $166.3M | $166.3M | $192.3M | $222.5M | $257.3M | $297.6M | $344.2M |
| Unlevered Free Cash Flow (FCF) | $78.6M | $78.6M | $90.9M | $105.1M | $121.6M | $140.6M | $162.6M |
| SBC-Adjusted True Cash Flow | $-87.8M | $-87.7M | $-101.5M | $-117.4M | $-135.7M | $-157.0M | $-181.6M |
Marketing Automation, CX & Messaging Peer Comparables Matrix
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Five9, Inc. | FIVN | $4.14B | $1.04B | 54.2% | 7.5% | 23.2% | 16.0% | 4.8× |
| Salesforce, Inc. | CRM | $307.82B | $37.90B | 76.8% | 32.4% | 43.4% | 8.4% | 8.0× |
| Twilio Inc. | TWLO | $38.62B | $2.83B | 80.7% | 27.3% | 51.3% | 17.8% | 12.9× |
| DocuSign, Inc. | DOCU | $29.38B | $3.57B | 75.7% | 21.7% | 45.5% | 17.2% | 7.7× |
| Zoom Video Communications | ZM | $17.84B | $1.58B | 72.8% | 20.8% | 43.2% | 12.5% | 11.0× |
| RAMP | RAMP | $17.48B | $1.43B | 72.6% | 25.3% | 42.9% | 19.7% | 12.1× |
| SEMR | SEMR | $57.62B | $4.34B | 82.8% | 33.8% | 57.0% | 15.2% | 12.8× |
| Peer Cohort Median Benchmark (N=6) | 76.3% | 26.3% | 44.5% | 16.2% | 11.6× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.8× | $5.01B | $4.14B | $55.60 | 0.0% |
| -20% Multiple Compression | 3.8× | $4.01B | $3.14B | $42.14 | -20.0% |
| -35% Multiple Compression | 3.1× | $3.26B | $2.39B | $32.05 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $5.21B | $4.34B | $58.24 | +3.9% |
Frequently Asked Questions: Five9, Inc. (FIVN) Valuation
What is Five9, Inc. (FIVN)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Five9, Inc. (FIVN) has a Base Case implied value of $12.98 per share (with a Bear Case of -$0.12 and a Bull Case of $30.11), compared to its current price of $55.60. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Five9, Inc. (FIVN)'s Rule of 40 score and Free Cash Flow margin?
Five9, Inc. achieves a Rule of 40 score of 23.2%, combining a 15.7% revenue growth run-rate with a 7.5% TTM free cash flow margin on $1.04B in trailing twelve-month revenue. In the Marketing Automation, CX & Messaging peer cohort, the median Rule of 40 benchmark is 44.5%.
What revenue growth rate is priced into FIVN stock according to Reverse-DCF analysis?
At $55.60 per share (Enterprise Value of $5.01B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 43.6%, compared to Five9, Inc.'s historical CAGR of 15.7%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does Five9, Inc. compare to Marketing Automation, CX & Messaging software peers?
Five9, Inc. (FIVN) earns an institutional Software Quality Score of 43/100 (Grade C — Capital Intensive / Low Margin). Across its Marketing Automation, CX & Messaging peer group (CRM, TWLO, DOCU, ZM, RAMP), the cohort trades at a median EV/TTM Revenue multiple of 11.6× and a median gross margin of 76.3%.
How does Stock-Based Compensation (SBC) impact Five9, Inc. (FIVN)'s valuation?
Five9, Inc. recorded $166.3M in TTM stock-based compensation (16.0% of revenue). When treating SBC as a cash-equivalent compensation expense, Five9, Inc.'s SBC-adjusted free cash flow yield is -2.1%, scoring 10/25 on our Shareholder Dilution Friction pillar.