Critical Review: VTEX (NYSE:VTEX) and Five9 (NASDAQ:FIVN)

Five9 (NASDAQ:FIVN) and VTEX (NYSE:VTEX) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

96.6% of Five9 shares are held by institutional investors. Comparatively, 63.7% of VTEX shares are held by institutional investors. 1.2% of Five9 shares are held by insiders. Comparatively, 40.9% of VTEX shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Five9 and VTEX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five9	$1.15 billion	2.08	$39.42 million	$0.69	45.26
VTEX	$252.65 million	2.39	$20.01 million	$0.16	22.09

Five9 has higher revenue and earnings than VTEX. VTEX is trading at a lower price-to-earnings ratio than Five9, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Five9 and VTEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five9	4.94%	12.92%	5.65%
VTEX	11.98%	12.98%	8.76%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Five9 and VTEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five9	0	7	10	1	2.67
VTEX	0	6	3	0	2.33

Five9 presently has a consensus price target of $33.14, indicating a potential upside of 6.13%. VTEX has a consensus price target of $4.69, indicating a potential upside of 32.60%. Given VTEX’s higher probable upside, analysts clearly believe VTEX is more favorable than Five9.

Volatility & Risk

Five9 has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, VTEX has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Summary

Five9 beats VTEX on 9 of the 15 factors compared between the two stocks.

About Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company’s platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, California.

About VTEX

VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. Its platform enables customers to execute their commerce strategy, including building online stores, integrating, and managing orders across channels, and creating marketplaces to sell products from third-party vendors. It has operations in Brazil, Argentina, Chile, Colombia, France, Italy, Mexico, Peru, Portugal, Romania, Singapore, Spain, the United Kingdom, and the United States. VTEX was founded in 2000 and is headquartered in London, the United Kingdom.