Actionable news
0
All posts from Actionable news
Actionable news in MSFT: Microsoft Corporation,

Baird Initiates Coverage On RingCentral At Neutral, Sees 7% Upside

RingCentral Inc. NYSE:RNG, Cisco Systems, Inc. NASDAQ:CSCO - Baird Initiates Coverage On RingCentral At Neutral, Sees 7% Upside

Baird Equity Research analysts William Power and Charles Erlikh initiated coverage on RingCentral Inc RNG 0.36% shares with a Neutral rating. They have kept a price tag of $24, indicating a possible 7 percent upside.

The comments come on the heels of Gartner naming RingCentral as a leader in its Magic Quadrant for Unified Communications as a service (UCaaS) for the year 2016. This was based on its capacity to execute and complete the vision.

In a research note to clients, the lead analyst said, "We are positive on the UCaaS growth opportunity, which we believe remains early innings, as well as RNG's positioning. However, with the stock near recent peaks and expectations high, we are initiating coverage with a Neutral rating and $24 target price, and would look for any weakness to perhaps become more aggressive."

The brokerage listed positives such as big market opportunity of $50+ billion, strong revenue growth of 33.9 percent recorded in the second quarter, software subscription revenue growing at a pace of 33.6 percent and capacity to scale its margins over a period of time. Aside from these, the market penetration is less than 10 percent and, as one of the stand-alone UCaaS leaders, the company is firmly placed.

On the flip side, Baird listed high expectations from investors, growing competition, entry of Microsoft Corporation MSFT 0.24% and Cisco Systems, Inc. CSCO 0.19% and the valuation at a near higher end of the historical range.

At time of writing, RingCentral was seen trading at $22.67, up 1.02 percent on Friday.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

DateFirmActionFromTo
Aug 2016BairdInitiates Coverage onNeutral
Aug 2016BairdInitiates Coverage onNeutral
Aug 2016JefferiesMaintainsBuy

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.