RingCentral‘s (RNG) shares have plummeted 27.6% in the year-to-date period compared with the Zacks Computer & Technology sector’s decline of 11.8%. The Internet - Software and Services have risen 4.5% in the same time frame.RNG has underperformed its peers, including Microsoft (MSFT) , Zoom Communication (ZM) and Cisco Systems (CSCO) , which are also making advancements in AI-driven UCAAS communication technology. For instance, Microsoft has enhanced its Teams platform by integrating AI Assistant and Zoom C ...

Investors in RingCentral, Inc. (RNG) need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 17, 2025 $17.50 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also ...

The outlook for the Internet-Software & Services industry reflects a relatively slow economy. The industry is highly correlated to the economy, and estimates have been moving up and down over the past year as expectations on interest rate decisions varied. The industry appears to be in cost-saving mode as operating expenses are coming down to generate profit despite revenue softness. Capital investments are also being limited, aside from a couple of companies. In this background, companies like RingCentral ...

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Group 1 - RingCentral (RNG) has experienced significant selling pressure, resulting in a 20% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously predicted [1] - The stock is currently in oversold territory, indicated by an RSI reading of 28.26, suggesting a potential trend reversal is imminent [5] - There has been a 23.5% increase in the consensus EPS estimate for RNG over the last 30 days, driven by a strong agreement among sell-side analysts, which typically correlates with price appreciation [6] Group 2 - RNG holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, utilizing fundamental analysis and traditional valuation metrics to find undervalued stocks in the market [2] Company Analysis - Ringcentral (RNG) is highlighted as a strong value stock, currently holding a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating its attractiveness to value investors [3] - The P/S ratio for RNG is 0.99, significantly lower than the industry average of 1.59, suggesting it may be undervalued [4] - RNG's P/CF ratio stands at 7.38, compared to the industry's average of 19.18, further indicating its potential undervaluation based on cash flow outlook [5] - The stock's P/CF has fluctuated between a high of 16.16 and a low of 7.32 over the past year, with a median of 11.47, reinforcing the notion of its current undervaluation [5] - Overall, the combination of RNG's strong earnings outlook and favorable valuation metrics positions it as an impressive value stock at this time [6]

Here are two stocks with buy rank and strong value characteristics for investors to consider today, February 28th:  Ringcentral (RNG) : This company which is a leading provider of contact center software-as-a-service (SaaS) solutions, along with global enterprise cloud communications, video meetings, collaboration, and customer engagement solutions that enable businesses to communicate, collaborate, and connect, carries a Zacks Rank #1 (Strong Buy), and has witnessed the Zacks Consensus Estimate for its cur ...

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation m ...

Financial Performance - Total revenues for the year ended December 31, 2024, were $2,400.4 million, with $2,297.2 million attributed to subscriptions[350]. - Total revenues for 2024 reached $2,400,395, an increase of 9% from $2,202,429 in 2023[358]. - Subscription revenues grew to $2,297,192 in 2024, up 9% from $2,100,329 in 2023[358]. - Gross profit for 2024 was $1,694,888, representing a 10% increase from $1,538,138 in 2023[358]. - The net loss for 2024 was $58,288, a significant improvement compared to a net loss of $165,240 in 2023[358]. - The company reported a basic and diluted net loss per share of $0.63 for 2024, improving from $1.74 in 2023[358]. - The total net loss before provision for income taxes for the year ended December 31, 2024, was $47.225 million, compared to a loss of $156.845 million in 2023[507]. - The company reported a net loss of $58.288 million for the year ended December 31, 2024, compared to a net loss of $165.240 million in 2023, indicating an improvement of approximately 64.7%[520]. - Basic net loss per share for 2024 was $(0.63), a significant improvement from $(1.74) in 2023[520]. Cash and Liquidity - The company had cash and cash equivalents of $242.8 million as of December 31, 2024[332]. - Cash and cash equivalents increased to $242,811 in 2024, up from $222,195 in 2023, reflecting a growth of 9.3%[355]. - The company experienced a net increase in cash of $20.616 million in 2024, contrasting with a net decrease of $47.789 million in 2023, highlighting improved liquidity[364]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $242.811 million, up from $222.195 million at the end of 2023[364]. Debt and Liabilities - Outstanding amounts included $161.3 million from 2025 Convertible Notes and $609.1 million from 2026 Convertible Notes[333]. - The company had $370.0 million principal outstanding under its Term Loan as of December 31, 2024[334]. - Total liabilities decreased to $2,131,343 in 2024 from $2,248,033 in 2023, a reduction of about 5.2%[355]. - The fair value of the 0% convertible senior notes due 2026 was approximately $557.4 million as of December 31, 2024[434]. - As of December 31, 2024, the net carrying amount of long-term debt was $1,347.9 million, down from $1,525.5 million in 2023[443]. - The total interest expense related to long-term debt for the year ended December 31, 2024, was $63.4 million, compared to $33.9 million in 2023[457]. Investments and Expenses - Research and development expenses were $329,323 in 2024, slightly down from $335,851 in 2023[358]. - The company capitalized $59.3 million in internal-use software development costs in 2024, compared to $56.0 million in 2023, showing continued investment in technology[377]. - The company incurred restructuring costs of $12.6 million in 2024 as part of efforts to optimize its cost structure[524]. - Advertising costs for the years ended December 31 were $96.0 million in 2024, $97.0 million in 2023, and $125.6 million in 2022[411]. Stock and Shareholder Information - The company repurchased 9,600 thousand shares of Class A Common Stock for a total amount of $316.9 million during the year ended December 31, 2024, compared to 10,066 thousand shares for $315.0 million in 2023[483]. - The total share-based compensation expense for the year ended December 31, 2024, was $339.1 million, a decrease of 20.5% from $426.7 million in 2023[490]. - The Company has 138,445 thousand shares of Class A Common Stock reserved for future issuance as of December 31, 2024[481]. - The Company has authorized 1,000,000,000 shares of Class A Common Stock and 250,000,000 shares of Class B Common Stock for issuance[479]. Tax and Regulatory Matters - The total income tax provision for 2024 was $11.063 million, an increase from $8.395 million in 2023[510]. - As of December 31, 2024, the Company had federal net operating loss carryforwards of approximately $1.4 billion, which do not expire[512]. - Unrecognized tax benefits at the end of 2024 totaled $30.193 million, a decrease from $31.976 million in 2023, reflecting a reduction of approximately 5.6%[515]. - The company has a full valuation allowance as of December 31, 2024, meaning current adjustments to unrecognized tax benefits will not impact the effective income tax rate[517]. Acquisitions and Goodwill - The Company acquired customer relationships and intellectual property assets for Mitel's offerings for a cash consideration of $26.3 million, with goodwill recognized at $7.7 million attributed primarily to assembled workforce and synergies[461]. - The acquisition of Hopin, Inc. was completed for a total purchase price of $22.2 million, including $14.7 million in cash and $7.5 million in contingent consideration, with goodwill recognized at $12.8 million[463]. - The carrying value of goodwill increased to $82.99 million as of December 31, 2024, from $67.37 million in 2023[426]. Accounting and Auditing - The company has adopted a new accounting method for convertible debt as of January 1, 2022[342]. - The company has been audited by KPMG LLP since 2010, with the latest audit report dated February 24, 2025[353].

Core Insights - RingCentral (RNG) reported fourth-quarter 2024 non-GAAP earnings of 98 cents per share, exceeding the Zacks Consensus Estimate by 2.08% and reflecting a 14% year-over-year increase [1] - Total revenues reached $614.5 million, surpassing the consensus mark by 0.37% and showing a 7.6% year-over-year growth, driven by a robust product portfolio and strong subscription revenues [2] - Despite the positive earnings report, RNG shares fell 2.57% in pre-market trading due to concerns over a subdued first-quarter 2025 outlook [2] Financial Performance - Software subscription revenues, which account for 96% of total revenues, increased 7.7% year over year to $589.7 million, beating the Zacks Consensus Estimate by 0.26% [4] - Other revenues, making up 4% of total revenues, rose 3.9% year over year to $24.8 million, exceeding the Zacks Consensus Estimate by 2.95% [4] - Annualized Exit Monthly Recurring Subscriptions (ARR) grew 7% year over year to $2.49 billion, with enterprise ARR also increasing 7% to $1.07 billion [4] Operating Metrics - Non-GAAP gross margin for the fourth quarter contracted by 110 basis points year over year to 77.3% [6] - Non-GAAP operating income was $131.2 million, up 12.1% year over year, with the operating margin expanding 90 basis points to 21.3% [7] - Non-GAAP EBITDA margin improved by 70 basis points year over year to 24.9% [7] Cash Flow and Share Repurchase - As of December 31, 2024, cash and cash equivalents were $243 million, up from $213 million as of September 30, 2024 [8] - Cash flow from operations was $132.9 million in the fourth quarter, compared to $127.2 million in the previous quarter [8] - The company repurchased shares worth $77 million in the fourth quarter, with a remaining repurchase authorization of $270 million [9] Guidance - For Q1 2025, RingCentral expects revenues of $607-$612 million, indicating year-over-year growth of 4-5%, with subscription revenues projected at $587-$592 million [10] - For the full year 2025, the company anticipates revenue growth of 4-6% and subscription revenue growth of 5-7% [11] - Non-GAAP earnings for 2025 are expected to be between $4.13 and $4.27 per share, with share-based compensation projected at $300-$310 million [11]