Cloud communications provider RingCentral (NYSE: RNG) will be reporting earnings this Thursday after the bell. Here’s what to look for.
RingCentral met analysts’ revenue expectations last quarter, reporting revenues of $644 million, up 4.8% year on year. It was a strong quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance beating analysts’ expectations.
Is RingCentral a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting RingCentral’s revenue to grow 5% year on year, in line with the 4.8% increase it recorded in the same quarter last year.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. RingCentral has a history of exceeding Wall Street’s expectations.
Looking at RingCentral’s peers in the productivity software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Five9 delivered year-on-year revenue growth of 9.2%, beating analysts’ expectations by 1.8%, and ServiceNow reported revenues up 22.1%, topping estimates by 0.6%. Five9 traded up 29.3% following the results while ServiceNow was down 17.7%.
Read our full analysis of Five9’s results here and ServiceNow’s results here.
There has been positive sentiment among investors in the productivity software segment, with share prices up 12.4% on average over the last month. RingCentral is up 26.6% during the same time and is heading into earnings with an average analyst price target of $37.47 (compared to the current share price of $48.21).
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