Analyst lowers price forecast for RingCentral due to slower growth and competition

From Yahoo Finance: 2025-04-24 17:21:00

Rosenblatt analyst Catharine Trebnick lowered RingCentral’s price forecast from $40 to $28 due to lower revenue projections for fiscal 2025 and 2026. She sees RingCentral as a stock for patient investors, expecting slower growth with increased competition and economic uncertainty.

The new price forecast of $28 reflects ~1.5 times Trebnick’s revenue estimate of 6% Y/Y in fiscal 2026. RingCentral’s stock is trading at a discount to its CCaaS group average, with a slower growth outlook due to economic conditions.

Trebnick revised her revenue growth rates for fiscal 2025 and 2026, with estimates below the Street’s expectations. Operating income and adjusted EPS for these years have also been adjusted downwards due to sales volume deceleration.

New products like RingCX, RingEvents, and RingSense are expected to drive $100 million in ARR in fiscal 2025. RingCentral’s recent introduction of AI-driven products is anticipated to boost revenue in the coming years.

Despite the adjustments, RNG stock closed higher by 6.38% to $25.01 on Thursday. This positive price action comes amidst ongoing changes in revenue projections and product offerings for RingCentral.

Read more: RingCentral A Stock for Patient Investors, AI Tools And New Products Show Early Promise: Analyst