UPDATE: RingCentral (RNG) PT Raised to $455 as Morgan Stanley Sees Upside as Partnerships Ramp
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Morgan Stanley analyst Meta Marshall raised the price target on RingCentral (NYSE: RNG) to $455.00 (from $420.00) after the company reported upside to Q4 on the back of sustained Enterprise ARR growth and strategic partnerships maturing. Overall ARR growth accelerated ~100 bps to 35% Y/Y but after the ~50% share price surge over the last 3 months, the acceleration was largely priced in.
The analyst would continue to be Overweight as partnerships ramp. He stated "RNG's ability to accelerate revenue growth on the back of a number of partnerships inked over the past 1-2 years that provide a unique advantage both in terms of channel reach and ability to offer a hybrid approach to UC is core to our OW thesis. We acknowledge expectations were high heading into the quarter given a ~17% move in the stock over the past month (and ~50% over L3M). As a result, incremental acceleration of ~100bps in Q4 (subscription revenue growth of 34% Y/Y from 33% in Q3), which was largely in-line with expectations noted in our preview, likely leading to some NT digestion, particularly after move post AVYA report. However, we believe upward trajectory is positive heading into FY21 and expect gradual acceleration to continue as partnerships layer in and expand."
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