The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how RingCentral (NYSE:RNG) and the rest of the video conferencing stocks fared in Q3.
Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.
The 4 video conferencing stocks we track reported a weaker Q3; on average, revenues beat analyst consensus estimates by 1.4% while next quarter's revenue guidance was 0.9% below consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but video conferencing stocks held their ground better than others, with the share prices up 27.4% on average since the previous earnings results.
Best Q3: RingCentral (NYSE:RNG)
Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.
RingCentral reported revenues of $558.2 million, up 9.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a narrow beat of analysts' revenue estimates but underwhelming revenue guidance for the next quarter.
“RingCentral is leveraging its leading position in Unified Communications to transform into an AI-first, multi-product company with proprietary offerings across UCaaS, CCaaS, Conversation and Revenue Intelligence, and Events, Webinars and Meetings,” said Tarek Robbiati, RingCentral’s CEO.
RingCentral delivered the weakest performance against analyst estimates of the whole group. The stock is up 13.6% since the results and currently trades at $32.08.
Is now the time to buy RingCentral? Access our full analysis of the earnings results here, it's free.
Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.
Zoom reported revenues of $1.14 billion, up 3.2% year on year, outperforming analyst expectations by 1.6%. It was a mixed quarter for the company, with its net revenue retention rate in jeopardy and decelerating growth in large customers. On the other hand, it narrowly topped analysts' revenue expectations during the quarter, driven by more new customer wins than projected. Its free cash flow also beat Wall Street's estimates significantly.
Zoom achieved the highest full-year guidance raise among its peers. The company added 59 enterprise customers paying more than $100,000 annually to reach a total of 3,731. The stock is up 3% since the results and currently trades at $68.07.
Is now the time to buy Zoom? Access our full analysis of the earnings results here, it's free.
Slowest Q3: 8x8 (NASDAQ:EGHT)
Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
8x8 reported revenues of $185 million, down 1.3% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
8x8 had the slowest revenue growth and weakest full-year guidance update in the group. The stock is up 61.4% since the results and currently trades at $3.7.
Started in 2001, Five9 (NASDAQ: FIVN) offers software as a service that makes it easier for companies to set up and efficiently run call centers, and offer more tailored customer support.
Five9 reported revenues of $230.1 million, up 16% year on year, surpassing analyst expectations by 2.5%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
Five9 scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 32.1% since the results and currently trades at $74.46.
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The author has no position in any of the stocks mentioned