We feel now is a pretty good time to analyse Five9, Inc.'s (NASDAQ:FIVN) business as it appears the company may be on the cusp of a considerable accomplishment. Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States and internationally. With the latest financial year loss of US$82m and a trailing-twelve-month loss of US$53m, the US$2.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Five9 will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 23 industry analysts covering Five9, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$37m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 57%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Five9's upcoming projects, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Five9 is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Five9 to cover in one brief article, but the key fundamentals for the company can all be found in one place – Five9's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Five9 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Five9 is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Five9's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.