BofA update shows where active managers are putting money
Investing.com - Oppenheimer upgraded RingCentral (NYSE:RNG) from Perform to Outperform on Wednesday, setting a price target of $35.00 following the company’s second-quarter results. According to InvestingPro data, the company currently trades at an enterprise value to EBITDA multiple of 13.3x, while maintaining a healthy gross profit margin of 71%.
The upgrade comes after RingCentral reported quarterly results that exceeded expectations across key metrics, prompting management to raise its fiscal year 2025 earnings per share and free cash flow guidance by 100-150 basis points. The company’s revenue grew 7.8% year-over-year, reaching $2.43 billion in the last twelve months, with analysts projecting continued growth of 5% for fiscal year 2025.
Oppenheimer cited RingCentral’s defensive characteristics and upside potential at an attractive entry point, noting the stock is trading near its five-year low while offering a projected free cash flow yield exceeding 20% for 2027. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional exclusive ProTips available to subscribers, including detailed insights on shareholder yield and management’s share buyback strategy.
The research firm highlighted significant improvements in RingCentral’s service and cost structure, which have helped operating margins more than double from approximately 10% to over 20% in the past five years, with expectations of continued annual expansion of 50-100 basis points.
RingCentral’s new products are on track to reach over $100 million in annual recurring revenue this year, doubling their previous contribution, according to Oppenheimer’s analysis.
In other recent news, RingCentral Inc. reported its second-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $1.06, exceeding the forecasted $1.02. Revenue also outperformed projections, reaching $620 million compared to the anticipated $617.85 million. Despite these positive financial results, the company’s stock experienced a slight decline in after-hours trading. Analysts have taken note of RingCentral’s performance, although specific upgrades or downgrades were not mentioned in the recent reports. These developments reflect the company’s current position in the market, providing insights into its financial health. Investors are closely monitoring these results for potential impacts on future performance.
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