RingCentral (NYSE: RNG) gained in pre-market trading after the provider of AI-powered global enterprise cloud communications reported its third quarter results. The company reported adjusted earnings of $0.78 per share as compared to earnings of $0.55 per share in the same period last year, which beat analysts’ consensus estimate of $0.75 per share.
The company’s revenues increased by 10% year-over-year to $558 million, surpassing analysts’ expectations of $554 million.
Looking forward, Sonalee Parekh, RingCentral’s CFO stated, “We are seeing early traction with our new products such as RingCX, RingSense and RingCentral Events. Our efficiency initiatives also continue to drive improved non-GAAP operating margins, which we are raising to 19.0%, at the high end of our prior range of 18.5% to 19.0%.”
As a result, the company’s management raised its FY23 guidance and now expects revenues in the range of $2.198 to $2.205 billion while adjusted earnings are anticipated to be between $3.19 and $3.20 per share. In the fourth quarter, the company has projected adjusted earnings in the range of $0.82 to $0.83 per share on revenues between $566.5 and $573.5 million. For reference, analysts were expecting $570 million in revenue and earnings of $0.81 per share.
Is RNG a Good Stock to Buy?
Analysts are cautiously optimistic about RNG stock with a Moderate Buy consensus rating based on 12 Buys and eight Holds. The average RNG price target of $41.71 implies an upside potential of 47.6% at current levels.
