RingCentral Stock Price Increased 31.7% This Past Month: Why It Happened

By Amit Chowdhry ● Dec 19, 2020
  • The stock price of RingCentral Inc (NYSE: RNG) increased by 31.7% this past month. This is why it happened.

The stock price of RingCentral Inc (NYSE: RNG) increased by 31.7% this past month. These are some of the reasons why it happened.

Executive Hires

Over the past month, RingCentral announced new executive hires. For example, Rajesh “Nat” Natarajan joined the company as the head of product and engineering was announced on November 19. Natarajan joined the company from Ancestry where he was Chief Product Officer and Chief Technology Officer.

And on December 10, RingCentral announced it appointed Matthew Bishop as Chief Digital Officer. Bishop previously worked at Microsoft for over 18 years and was most recently the Corporate Vice President of Commercial Strategy and Operations of Microsoft’s Worldwide Commercial Business.

Partnership And Customer Wins

– December 2 — RingCentral announced a strategic partnership with Vodafone Business.

– December 3 — RingCentral revealed that the San Francisco Symphony is using RingCentral Video (part of its flagship product RingCentral Office) to connect with audiences virtually with fun and interactive entertainment.

– December 7 — RingCentral signed a deal with Pinnacle Renewable Energy (TSX: PL), an industrial wood pellet manufacturer and distributor, to adopt RingCentral Office.

– December 7 — Communication and connectivity company Horizon Telecom announced a deal with RingCentral where it will offer RingCentral Office to large-scale multinational enterprises around the world.

Price Target Increases

This past month, RingCentral received a few price target increases. Mizuho increased its price target from $350 to $400; Morgan Stanley increased its price target from $300 to $430; and Raymond James increased its price target from $355 to $450.

Most recently, Raymond James analyst Brian Peterson kept a Strong Buy rating on the company shares. In recent meetings with RingCentral management, Peterson realized the company’s long-term growth potential. 

“While we’re encouraged to see shares brush off the recent narrative on competitive concerns (stock up 50% since 10/31), we still don’t think investors fully grasp the magnitude of the medium and long-term growth opportunity,” said Peterson in a research report via Seeking Alpha.

Peterson believes that RingCentral’s monetization of its 210 million users through preferred migration partners will accelerate in 2021 and 2022. And as the company’s channel partner reach expands, Peterson believes RingCentral will be “re-rated to an elite growth SaaS valuation.”

Currently, the new price target is 30x the company’s “conservative” 2021 estimate.

Major Product Announcement: Glip

Several days ago, RingCentral announced a major product called Glip. Glip is a free video and messaging service that competes against Zoom Video. There is also a paid version of the tool as well.

Glip video meetings last up to 24 hours for up to 100 people and provide a completely integrated team collaboration capability. And RingCentral Glip also offers peace of mind with RingCentral’s well-known carrier-grade quality, security, reliability, and global footprint.

Some of the key features of RingCentral Glip includes the 24-hour meeting duration, unlimited users per account, up to 100 participants per meeting, one-click host and join, app integrations, ability to switch live meetings between devices, integrated team messaging, Flip to Glip (Convert email threads to team messaging), screen sharing, cloud recording for up to 7 days, HD audio and video, virtual backgrounds, closed captioning, secure meetings, meeting host controls, waiting rooms, Dark mode, noise reduction, and CCPA and HIPAA compliance.

Quotes About Glip:

“We’re moving to the hybrid world of work where we transition from transactional and disjointed video meetings to collaborative experiences that address pre-, during- and post-meeting needs. RingCentral Glip has been designed to make video meetings smarter. It reduces wasted time and lets you focus on what matters. We’re launching a free version of RingCentral Glip so everyone can now experience smart video meetings with integrated team messaging for improved productivity.”

— Anand Eswaran, president and chief operating officer at RingCentral

“The power of messaging integrated with video has taken our internal communications to a whole new level. With RingCentral Glip Pro, we are able to have meaningful conversations quickly and efficiently.”

— Paul Rapier, vice president, Information Technology, Detroit Pistons

“With Glip, RingCentral is making its messaging and video available to more users. By making the telephony component optional, Glip now addresses a wider variety of use cases in business communications. Glip offers an efficient way to increase collaboration and also boosts productivity by reducing the need to switch apps. The freemium approach makes it even more appealing.”

— Dave Michels, principal analyst, and founder, TalkingPointz

Disclosure: I have a small RNG position in my stock portfolio