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RingCentral
(NYSE:RNG)
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Rating:71Outperform
Price Target:
$44.00
▲(8.94% Upside)
Action:Reiterated
Date:05/09/26
The score is driven by strong cash generation and improving profitability reinforced by raised guidance, plus supportive technical momentum. It is held back primarily by balance-sheet weakness (negative equity) and a notably slowed growth profile, with valuation only modestly supportive.
Positive Factors
Free cash flow strength
Sustained, improving free cash flow (FCF exceeding prior-year levels and roughly tracking net income) provides durable internal funding for R&D, buybacks, dividends and debt paydown. That reduces refinancing risk and supports strategic investments over the next 2–6 months and beyond.
Negative Factors
Negative shareholders' equity
Persistent negative equity limits balance-sheet cushion and complicates leverage metrics, reducing resilience to downturns. Even with recent debt reduction, negative equity constrains borrowing flexibility, strategic M&A capacity and investor perception over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained, improving free cash flow (FCF exceeding prior-year levels and roughly tracking net income) provides durable internal funding for R&D, buybacks, dividends and debt paydown. That reduces refinancing risk and supports strategic investments over the next 2–6 months and beyond.
Read all positive factors
RingCentral Key Performance Indicators (KPIs)
Any
Subscription ARR
Shows the annual recurring revenue from subscriptions, reflecting the stability and predictability of the company's income stream.
Shows the annual recurring revenue from subscriptions, reflecting the stability and predictability of the company's income stream.
Data provided by:
The Fly
The FlyRingCentral (RNG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.36B
Dividend YieldN/A
Average Volume (3M)1.69M
Price to Earnings (P/E)41.2
Beta (1Y)1.45
Revenue Growth4.90%
EPS GrowthN/A
CountryUS
Employees4,260
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.97
Shares Outstanding74,079,060
10 Day Avg. Volume1,377,213
30 Day Avg. Volume1,689,619
Financial Highlights & Ratios
PEG Ratio-0.32
Price to Book (P/B)-4.23
Price to Sales (P/S)0.99
P/FCF Ratio4.23
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue1.75
Enterprise Value/Gross Profit2.45
Enterprise Value/Ebitda10.61
Forecast
1Y Price Target
$44.80Price Target Upside10.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)4.91
Revenue Forecast (FY)$2.63B
RingCentral Business Overview & Revenue Model
Company Description
RingCentral, Inc. delivers sophisticated cloud-based software-as-a-service (SaaS) solutions designed to empower businesses across North America to communicate, collaborate, and connect seamlessly. These core offerings, including both unified commu...
How the Company Makes Money
RingCentral primarily makes money through recurring subscription revenue from its cloud-based communications and contact center offerings. The core revenue stream is subscription fees paid by customers for access to UCaaS products (e.g., cloud pho...
RingCentral Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong margin expansion, improved GAAP profitability, meaningful free cash flow growth, disciplined capital allocation, and accelerating adoption of AI-enabled products with clear early traction across AIR, ACE, RingEX and CEB. Key operational wins (customer migrations, large partner engagements, R&D investment and leadership recognitions) support a positive outlook. The principal negatives are that top-line growth remains mid-single-digits and AI monetization, while progressing rapidly, is still early in aggregate; some benefits from partner channels are expected to be realized over the next 12–24 months. Overall, financial and operational momentum (profitability, cash generation, margin improvement, AI adoption and customer wins) materially outweighs the risks and early-stage limitations.Positive Updates
Revenue and ARR Growth
Total revenue of approximately $644 million, up 5.3% year-over-year and at the high end of guidance; subscription revenue of ~$623 million, up 5.6% year-over-year. Management cites a $2.7 billion ARR business.
Negative Updates
Modest Overall Revenue Growth Rate
Top-line growth remains in the mid-single-digit range (Q1 revenue +5.3% YoY; full-year subscription revenue guidance growth 4.7%–5.5%, total revenue guidance growth 4.2%–5%), prompting investor questions about breaking decisively above ~5% growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and ARR Growth
Total revenue of approximately $644 million, up 5.3% year-over-year and at the high end of guidance; subscription revenue of ~$623 million, up 5.6% year-over-year. Management cites a $2.7 billion ARR business.
Read all positive updates
Company Guidance
RingCentral raised its 2026 outlook, now forecasting subscription revenue of $2.54–$2.56B (up 4.7%–5.5%) and total revenue of $2.62–$2.64B (up 4.2%–5%), with GAAP operating margin of 8.9%–9.6% (expanding ~450 bps YoY) and non‑GAAP operating margin of 23.3%–23.7% (expanding ~100 bps YoY). Management expects free cash flow of $590–$605M (roughly $600M, +13% YoY), SBC of approximately $240–$245M (improving ~180 bps YoY as a percent of revenue), fully diluted shares of ~86.5–87.0M (down ~5% YoY), non‑GAAP EPS of $4.85–$5.01 (+13% YoY) and free cash flow per share of $6.78–$6.99 (+18% YoY). For Q2, guidance is subscription revenue of $628–$633M, total revenue $648–$653M, GAAP operating margin 6.6%–7.6% (up ~110 bps YoY), non‑GAAP operating margin ~23.0%–23.2% (up ~50 bps YoY), non‑GAAP EPS $1.15–$1.17 (+10% YoY), SBC $58–$62M (improving ~130 bps YoY) and diluted shares of ~87M (down ~6% YoY).RingCentral Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
28
Negative
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.55B | 2.52B | 2.40B | 2.20B | 1.99B | 1.59B |
| Gross Profit | 1.82B | 1.79B | 1.69B | 1.54B | 1.35B | 1.15B |
| EBITDA | 420.45M | 381.43M | 236.58M | 113.09M | -622.68M | -184.05M |
| Net Income | 84.34M | 43.39M | -58.29M | -165.24M | -879.17M | -376.25M |
Balance Sheet | ||||||
| Total Assets | 1.42B | 1.48B | 1.78B | 1.94B | 2.07B | 2.58B |
| Cash, Cash Equivalents and Short-Term Investments | 116.58M | 132.56M | 242.81M | 222.19M | 269.98M | 267.16M |
| Total Debt | 1.45B | 1.48B | 1.58B | 1.59B | 1.68B | 1.45B |
| Total Liabilities | 2.03B | 2.07B | 2.33B | 2.45B | 2.56B | 2.24B |
| Stockholders Equity | -609.32M | -588.12M | -550.92M | -502.57M | -482.79M | 338.97M |
Cash Flow | ||||||
| Free Cash Flow | 663.53M | 587.32M | 400.21M | 323.92M | 100.87M | -244.68M |
| Operating Cash Flow | 638.45M | 617.43M | 483.28M | 399.66M | 191.31M | 152.15M |
| Investing Cash Flow | -119.81M | -107.97M | -109.36M | -90.45M | -87.21M | -396.83M |
| Financing Cash Flow | -557.71M | -623.42M | -351.08M | -358.02M | -98.22M | -127.05M |
RingCentral Technical Analysis
Positive
40.39
Price Trends
40.97
Negative
38.64
Positive
33.48
Positive
Market Momentum
-0.64
Negative
52.83
Neutral
85.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RNG, the sentiment is Positive. The current price of 40.39 is above the 20-day moving average (MA) of 38.27, below the 50-day MA of 40.97, and above the 200-day MA of 33.48, indicating a neutral trend. The MACD of -0.64 indicates Negative momentum. The RSI at 52.83 is Neutral, neither overbought nor oversold. The STOCH value of 85.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RNG.
RingCentral Risk Analysis
RingCentral disclosed 55 risk factors in its most recent earnings report. RingCentral reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RingCentral Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.36B | 41.25 | -16.71% | ― | 4.90% | ― | |
67 Neutral | $374.98M | 35.18 | 1.82% | ― | 9.23% | ― | |
64 Neutral | $1.66B | -102.64 | 32.36% | ― | 13.03% | 7.07% | |
62 Neutral | $881.21M | 7.65 | 8.36% | ― | 3.64% | 230.24% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $259.46M | 166.36 | 1.20% | ― | 2.89% | ― | |
58 Neutral | $1.69B | -10.63 | -92.84% | ― | 9.47% | 31.43% |
* Technology Sector Average
RNG
RingCentral
40.01
10.53
35.71%
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1.83
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2.99
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API
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7.34
-6.93
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.