RingCentral (RNG) First Quarter Earnings: What to Expect

RNG cover image

Office and call center communications software provider RingCentral (NYSE:RNG) will report earnings tomorrow after market hours. Here’s what to expect.

RingCentral met analysts’ revenue expectations last quarter, reporting revenue of $571.3 million, up 8.9% year-over-year. It was a weaker quarter for the company, as revenue forecasts for the full year fell short of analyst expectations and management predicted a slowdown in growth.

Does a RingCentral purchase or sale transaction affect earnings? Read our full analysis here, it’s free.

For this quarter, analysts expect RingCentral’s revenue to grow 8.3% year-over-year to $578.2 million, a slowdown from the 14.1% growth reported in the same quarter last year. Adjusted earnings per share are expected to be $0.80.

Total RingCentral revenues

Most analysts covering the company have reaffirmed their estimates over the last 30 days, suggesting they expect the company to remain on track towards earnings. Over the past two years, RingCentral has missed Wall Street revenue estimates only once, exceeding expectations by an average of 0.9%.

Looking at RingCentral’s competitors in the productivity software segment, some have already reported first-quarter results, which gives us a hint of what to expect. Five9 saw year-over-year revenue growth of 13.1%, beating analyst expectations by 2.9%, and ServiceNow saw revenue growth of 24.2%, in line with the consensus. Following the results, Five9 gained 2.1%, while ServiceNow fell 4.1%.

Read our full analysis of Five9’s results here and ServiceNow’s results here.

Valuation multiples for many growth stocks have not yet returned to the highs seen in early 2021, but the market became more optimistic in late 2023 thanks to cooling inflation. The start of 2024 is a different story as mixed signals have led to market volatility and while some productivity software stocks have performed slightly better, they have not been spared, with share prices down an average of 3.1% over the past month . Meanwhile, RingCentral is down 7.5% and heading toward earnings, with an average analyst price target of $39.8 (versus the current share price of $30.49).

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