NEW YORK (TheStreet) -- Shares of Five9 (FIVN) - Get Report are increasing by 3.85% to $9.70 on heavy trading volume late Tuesday afternoon, as Canaccord Genuity raised its price target to $11 from $10 and maintained its "buy" rating.
The San Ramon, CA-based company is a provider of cloud software for contact centers.
Recent travels with the company's management reaffirmed Canaccord Genuity's belief that the contact center is still in the early days of a multi-year upgrade to the cloud.
"What investors perhaps underestimate is the pull through of the infrastructure technologies that firm's like Five9 and their cloud counterparts provide - buyers are quite unlikely to integrate a new cloud CRM application with an on-premise UC platform, and the legacy vendors are standing still in terms of their migration to the cloud," the firm wrote in an analyst note.
Five9 is a good bet for small-cap investors, Canaccord Genuity said.
"In terms of FIVN the stock, our experience suggests that revenue multiple compression is improbable in the face of steadily increasing estimates and that more likely, we could see gradual multiple expansion as the firm crosses into meaningful profitability," the firm added.
About 1.45 million of the company's shares were traded by this afternoon vs. its average volume of 349,822 shares per day.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
This is driven by multiple weaknesses, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: FIVN