Summit Research upgraded RingCentral (NYSE: RNG) from Hold to Buy with a price target of $25.00.

Analyst Jonathan Kees commented, "Solid 3Q15 (Sep) quarter due to strength in large deals and carrier sales; upgrading to BUY from HOLD due to expectations of continued strength in these topline drivers; 2016 Street estimates look conservative. RingCentral (RNG)'s 3Q15 numbers were incrementally better than consensus on the topline with strong beat on bottom line due to margins improvement. We are however excited that large deals (50 seats+) were 25% of bookings in 3Q from 2Q15's 20% and should continue to grow going forward and that carrier sales were ~20% of revenues in 3Q, a new record, and should also continue to grow. Each should drive topline growth, what most investors expect from this name, and gross margin (GM) expansion, a major factor in keeping RNG profitable and CF positive. Each would be an upmarket and upscale change to RNG's traditional business model of serving small businesses (<<50 seats). We see 2016 estimates to likely increase due to these factors, along with international expansion. We upgrade to BUY from HOLD and set our price target (PT) to $25 based on utilizing a 4.8x EV/Sales multiple off 2016 sales of $367.6M. "

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Shares of RingCentral closed at $19.35 yesterday.