RingCentral Earnings: Solid Result as Management Focuses on Innovation and AI

No-moat RingCentral reported third-quarter results that exceeded our expectations, with solid performance on both the top and bottom lines, while the outlook was in line with our forecast. New CEO Tarek Robbiati highlighted his priorities, which include building a multiproduct business, focusing more on key segments and verticals, expanding partnerships, growing globally, and improving operations, which are easy for us to support. The firm highlighted traction with new products, notably RingCX and RingSense. RingCentral also provided an update on its improving balance sheet that includes continued refinancing and repurchasing of convertible notes. Given results and guidance, our model changes are minor, thus we maintain our fair value estimate of $51 per share. Shares remain undervalued in our view but we prefer wide-moat stocks in our coverage.