RingCentral Earnings: Right Down the Middle of the Fairway

We are raising our fair value estimate to $55 per share, from $51 previously for no-moat RingCentral as the company continues to perform well on a quarterly basis. The company reported third-quarter results that beat our aggressive top-line expectations, while profitability came in as expected. The firm continues to make progress on expanding its product portfolio while it races to infuse its solutions with AI and manage the business for profitable growth. Guidance for the fourth quarter was in line, if not slightly better than our near-term model. The company also announced that Abhey Lamba will join the firm as CFO within the next several weeks. Lamba is a good choice with a strong background, including most recently at Amazon Web Services where he was the vice president of global infrastructure. While we acknowledge the market view that pricing will come under pressure, we think our assumptions already reflect that, and we view shares as attractive, even if we prefer some moatier names within our coverage.