Five9 (FIVN) Under Pressure: Piper Sandler Downgrades Stock to Neutral

Five9, Inc. (NASDAQ:FIVN) is one of the AI Stocks on the Market's Radar. On January 4, Piper Sandler analyst James Fish downgraded the stock from Overweight to “Neutral” with a price target of $21.00 (from $26.00).

The downgrade comes despite a compelling risk-reward for FIVN, as execution challenges may limit upside. The firm believes that FIVN is facing significant challenges even though the company is slowly gaining more market share in customer experience and also has room to improve cash flow.

Some of these challenges include how the company isn’t gaining market share particularly in the contact-center-as-a-service market, is facing positioning challenges in the upmarket segment, and is also under increased competition.

The analysts also discussed how the company has had several “go-to-market shuffles over the last few quarters.” Moreover, the company’s growth is decelerating to less than 10%, and while management has provided outlook for 2026 (including a re-acceleration in the second half of that year to over 10%), the firm believes that this will likely take time to materialize.

Furthermore, despite the company’s AI traction and shift toward more consumption-based offerings, artificial intelligence concerns are continuing to weigh on seat-based models like FIVN, analysts noted.

“Growth is decelerating to [less than] 10%, and while management has given color for 2026 already that includes a re-acceleration in 2H26 to [more than] 10%, it will likely take some time for this to play out and AI concerns continue to weigh on primarily seat-based models like Five9 (despite AI traction and shift towards more consumption). A new CEO has taken over, but the best path medium-term would be likely to go private at this stage.”

Five9, Inc. (NASDAQ:FIVN) is a technology company that offers cloud software solutions for contact centers.

While we acknowledge the potential of FIVN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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