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RingCentral
(NYSE:RNG)
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Rating:71Outperform
Price Target:
$70.00
▲(44.90% Upside)
Action:Reiterated
Date:08/09/26
The score is driven primarily by improved profitability and strong, rising free cash flow, reinforced by an earnings call that raised guidance and highlighted continued margin expansion and capital return. Offsetting this are balance-sheet weakness (negative equity), a technically overbought setup that raises near-term pullback risk, and a relatively high P/E multiple given only mid-single-digit revenue growth.
Positive Factors
Large Recurring ARR Base
A $2.7B ARR base reflects durable, subscription-driven revenue and predictable cash flows. Large ARR supports scalable upsell, retention leverage and forecasting visibility, reducing revenue volatility and underpinning long-term enterprise value beyond quarter-to-quarter noise.
Negative Factors
Balance Sheet: Negative Equity
Persistent negative shareholders’ equity constrains conventional leverage metrics and reduces cushion against macro shocks or execution setbacks. Even with recent debt paydowns, the structural equity deficit limits M&A optionality, rating resiliency, and increases sensitivity to future cash shortfalls.
Read all positive and negative factors
Positive Factors
Negative Factors
Large Recurring ARR Base
A $2.7B ARR base reflects durable, subscription-driven revenue and predictable cash flows. Large ARR supports scalable upsell, retention leverage and forecasting visibility, reducing revenue volatility and underpinning long-term enterprise value beyond quarter-to-quarter noise.
Read all positive factors
RingCentral Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Highlights profitability across different business segments, indicating which areas are most lucrative and where there might be room for improvement.
Highlights profitability across different business segments, indicating which areas are most lucrative and where there might be room for improvement.
Data provided by:
The Fly
The FlyRingCentral (RNG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.66B
Dividend Yield0.43%
Average Volume (3M)1.88M
Price to Earnings (P/E)50.0
Beta (1Y)1.57
Revenue Growth5.22%
EPS GrowthN/A
CountryUS
Employees7,378
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.29
Shares Outstanding73,736,626
10 Day Avg. Volume2,574,229
30 Day Avg. Volume1,881,938
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$45.22Price Target Upside-6.39% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)4.92
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:Nov 09, 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
68
Positive
Balance Sheet
35
Negative
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.58B | 2.52B | 2.40B | 2.20B | 1.99B | 1.59B |
| Gross Profit | 1.86B | 1.79B | 1.69B | 1.54B | 1.35B | 1.15B |
| EBITDA | 337.40M | 381.43M | 236.58M | 113.09M | -622.68M | -184.05M |
| Net Income | 110.26M | 43.39M | -58.29M | -165.24M | -879.17M | -376.25M |
Balance Sheet | ||||||
| Total Assets | 1.38B | 1.48B | 1.78B | 1.94B | 2.07B | 2.58B |
| Cash, Cash Equivalents and Short-Term Investments | 111.50M | 132.56M | 242.81M | 222.19M | 269.98M | 267.16M |
| Total Debt | 1.34B | 1.48B | 1.58B | 1.59B | 1.68B | 1.45B |
| Total Liabilities | 1.99B | 2.07B | 2.33B | 2.45B | 2.56B | 2.24B |
| Stockholders Equity | -610.36M | -588.12M | -550.92M | -502.57M | -482.79M | 338.97M |
Cash Flow | ||||||
| Free Cash Flow | 671.36M | 587.32M | 400.21M | 323.92M | 100.87M | -244.68M |
| Operating Cash Flow | 677.47M | 617.43M | 483.28M | 399.66M | 191.31M | 152.15M |
| Investing Cash Flow | -123.02M | -107.97M | -109.36M | -90.45M | -87.21M | -396.83M |
| Financing Cash Flow | -609.17M | -623.42M | -351.08M | -358.02M | -98.22M | -127.05M |
RingCentral Technical Analysis
Positive
48.31
Price Trends
45.60
Positive
43.12
Positive
36.67
Positive
Market Momentum
6.10
Negative
69.27
Neutral
82.00
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 48.31 is below the 20-day moving average (MA) of 55.39, above the 50-day MA of 45.60, and above the 200-day MA of 36.67, indicating a bullish trend. The MACD of 6.10 indicates Negative momentum. The RSI at 69.27 is Neutral, neither overbought nor oversold. The STOCH value of 82.00 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 | $5.66B | 49.99 | -20.59% | 0.31% | 5.22% | ― | |
69 Neutral | $1.92B | -141.76 | 25.17% | ― | 15.79% | -125.94% | |
67 Neutral | $451.66M | 40.70 | 1.82% | ― | 9.23% | ― | |
63 Neutral | $1.25B | -2.17 | -40.51% | ― | 2.66% | -808.37% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $303.31M | 63.03 | 3.34% | ― | 3.66% | ― | |
58 Neutral | $2.28B | -13.24 | -92.84% | ― | 9.47% | 31.43% |
* Technology Sector Average
RNG
RingCentral
64.49
33.91
110.92%
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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.