RingCentral Earnings: Enterprise Strength Continues with Firm's Largest Deal Ever

No-moat RingCentral reported first-quarter results that bested our top-line expectations while meeting our profitability estimate. Management’s outlook was in line with or slightly better than our estimates for revenue and adjusted operating margin, while free cash flow was notably better. We see the company as progressing on its goal of becoming a multiproduct company, with RingCX off to a good start, while deleveraging and expanding margins. Given the results and guidance, our model changes are negligible, so we maintain our $51 fair value estimate. The shares remain undervalued, in our view, but we prefer wide-moat stocks in our coverage.