Office and call centre communications software provider RingCentral (NYSE:RNG) will be reporting earnings tomorrow after the bell. Here's what investors should know.
Last quarter RingCentral reported revenues of $509 million, up 22.8% year on year, beating analyst revenue expectations by 1.28%. Despite the stock soaring on the results, it was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and the full year.
Is RingCentral buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting RingCentral's revenue to grow 17.7% year on year to $527.9 million, slowing down from the 34.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.59 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3.52%.
Looking at RingCentral's peers in the productivity software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. 8x8 delivered top-line growth of 17.5% year on year, missing analyst estimates by 0.91% and Atlassian reported revenues up 26.7% year on year, exceeding estimates by 2.74%. 8x8 traded flat on the results, Atlassian was down 10%. Read our full analysis of 8x8's results here and Atlassian's results here.
There has been positive sentiment among investors in the software segment, with the stocks up on average 12.3% over the last month. RingCentral is up 17.8% during the same time, and is heading into the earnings with analyst price target of $51.5, compared to share price of $43.0.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
The author has no position in any of the stocks mentioned.