Analyst Michael Funk from Bank of America Securities reiterated a Buy rating on RingCentral (RNG – Research Report) and increased the price target to $47.00 from $45.00.
Michael Funk has given his Buy rating due to a combination of factors that underline RingCentral’s solid financial performance and growth prospects. RingCentral is demonstrating robust annual recurring revenue (ARR) that exceeds $2.3 billion and is trading at an attractive free cash flow (FCF) yield, indicating strong cash generation which may be underestimated by the market. With a positive momentum in earnings estimates and the company’s success in stabilizing its enterprise growth, Funk sees potential for the stock to experience a re-rating. Moreover, the introduction of new products like RingCX and RingSense, coupled with a substantial buyback authorization, further supports the optimistic outlook.
The bullish stance on RingCentral’s cash flow is reinforced by the company’s recent performance, which surpassed expectations in total revenue and non-GAAP operating margin. The upward revision of the fiscal year free cash flow guidance by $25 million and the signing of the largest enterprise deal in the company’s history are key highlights that informed Funk’s rating. Furthermore, the company’s non-GAAP gross margin and reiteration of its operating margin guidance suggest a conservative yet promising financial management approach. Taking into account these strong financial indicators and the strategic positioning of RingCentral, Funk confidently reiterates a Buy rating and raises the price objective to $47, reflecting an anticipation of continued market share gains and margin improvements.
According to TipRanks, Funk is an analyst with an average return of -3.2% and a 47.56% success rate. Funk covers the Technology sector, focusing on stocks such as Autodesk, RingCentral, and Smartsheet.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
RingCentral (RNG) Company Description:
Founded in 1999, California-based RingCentral, Inc. provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect in North America. The company’s products include RingCentral Professional, RingCentral Office, RingCentral Glip, and RingCentral Fax.
Read More on RNG:
