Raymond James Downgrades RingCentral (RNG) to Outperform

Raymond James analyst Brian Peterson downgraded RingCentral (NYSE: RNG) from Strong Buy to Outperform with a price target of $45.00 (from $50.00).

The analyst comments: "We’re downgrading shares of RingCentral to Outperform from Strong Buy, following modest share outperformance over the past six months (RNG shares up 19% versus the IGV up 15%). We still believe shares offer a positive risk/reward for investors and note the very attractive FCF valuation (10x our 2026 FCF estimate), as a vastly improved FCF profile and balance sheet should increasingly appeal to investors. At the same time, UCaaS valuations have lagged the group for several years, and we don’t see a near-term catalyst to close the valuation gap vs. peers. We also see potential volatility in shares ahead of the initial CY24 guidance, with several analysts modeling Subscription revenue growth of 8%+ vs. our forecast of 7%. We still believe there could be upside to our FCF projections and that the risk/reward remains attractive, but we’re slightly less bullish on the near-term setup."

For an analyst ratings summary and ratings history on RingCentral click here. For more ratings news on RingCentral click here.

Shares of RingCentral closed at $34.83 yesterday.

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