Analyst Note| Dan Romanoff, CPA |
Narrow-moat RingCentral delivered strong third-quarter results, as revenue and profitability both exceeded our and CapIQ consensus estimates, and provided better-than-expected guidance for the fourth quarter. As companies continue to navigate the remote work environment across the globe, we believe RingCentral will be able to leverage its position in the unified communications-as-a-service, or UCaaS, market and capitalize on digital transformation trends by offering an enhanced communications platform. After filtering our model for results and guidance, we are raising our fair value estimate to $293 from $288 per share, and continue to view RingCentral as well positioned to drive UCaaS adoption over the next decade even as COVID-19 lockdowns ease. With shares closing at $267 today, we view shares as increasingly attractive.