RingCentral Inc. (RNG): Technicals Say You should Hold

RingCentral Inc. (NYSE:RNG) saw an upside of 3.98% on Friday at $226.15 after adding $8.65. The 5-day average trading volume is 1,206,030 shares of the company’s common stock. It has gained $235.88 in the past week and touched a new high 2 times within the past 5 days. An average of 1,332,892 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,127,929.

RNG’s 1-month performance is -13.78% or -$35.03 on its low of $210.37 reached on 09/28/21. The company’s shares have touched a 52-week low of $210.37 and high of $449.00, with the stock’s rally to the 52-week high happening on 02/16/21. YTD, RNG has lost -42.61% or -$152.90 and has reached a new high 11 times. However, the current price is down -49.63%% from the 52-week high price.


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Insider Transactions

On Sep 14, 17 days have gone by since the last insider trading activity for RingCentral Inc. (RNG). Shmunis Vladimir (CEO & Chairman) most recently sold 29,652 shares at $218.58 per share on Sep 14. This transaction cost the insider $6,481,392. SVP, CAO & General Counsel, Marlow John H, sold 7,500 shares at a price of $233.78 on Sep 09. Then, on Sep 09, SVP, CAO & General Counsel Marlow John H sold 670 shares at a price of $233.76 per share. This transaction amounted to $156,620.

Valuation Metrics

RingCentral Inc. (RNG) has a trailing price-to-earnings (P/E) ratio of 30.97 for the broader industry and 36.62 for the sector, meaning that investors are optimistic about the stock’s future prospects. RNG stock has a beta of 0.67. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 14.60 while the price-to-book (PB) in the most recent quarter is 215.35.

RingCentral Inc.’s quick ratio for the period ended June 29 was 1.40, with the current ratio over the same period at 1.50 meaning that RNG stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 14.80, while the total debt to equity was 14.80. In terms of profitability, the gross margin trailing 12 months is 72.60% while for the period ending June 29; RingCentral Inc.’s operating margin was -13.20%. The firm’s gross profit as reported stood at $860.05 million against revenue of $1.18 billion.

The effectiveness of a company’s management is also important for investors when it comes to determining the potential profitability of the investment. RingCentral Inc.’s return on assets over the past 12 months stands at -6.40%. Return on investment over the past year is -7.40%, while its return on equity (ROE) trailing 12 months is -58.10%. In comparison, the average ROE for the broader industry over the past year is 4.90.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 26.7% to $379.27 million, while revenue of $352.36 million was 7.1% off the previous quarter. Analysts expected RNG to announce $0.28 per share in earnings in its latest quarter, but it posted $0.32, representing a 14.30% surprise. EBITDA for the quarter stood at more than -$13.6 million. RNG stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 1.88 billion, with total debt at $1.42 billion. Shareholders hold equity totaling $91.51 million

Technical Picture

Let’s look briefly at RingCentral Inc. (RNG) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 30 September was 51.36% to suggest the stock is trending Neutral, with historical volatility in this time period at 32.51%.

The stock’s 5-day moving average is $218.00, reflecting a +1.77% or $3.94 change from its current price. RNG is currently trading -11.52% above its 20-day SMA, -15.16% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -17.00% and -35.97% respectively.

Stochastic %K and %D was 33.07% and 22.22% and the average true range (ATR) pointed at 8.69. The RSI (14) points at 45.86%, while the 14-day stochastic is at 61.54% with the period’s ATR at 8.56. The stock’s 9-day MACD Oscillator is pointing at -1.40 and -2.98 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for RingCentral Inc. (NYSE: RNG), Needham launched coverage with a Buy rating. Analysts offering their rating for RNG stock have a consensus rating for the stock as Buy. Currently, 0 brokerage advisors rate RNG as a “sell,”, while 3 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 0 rates the stock as overweight while 21 have offered a “buy” rating.

What is RNG’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $300.00 and a high of $480.00, with their median price target at $410.00. Looking at these predictions, the average price target given by analysts is for RingCentral Inc. (RNG) stock is $408.43.

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