RingCentral Stock Dips On Analyst Warning Over 2025 Risks: Retail Sees Silver Lining

Shares of Belmont California-based RingCentral, Inc. ($RNG), a cloud-based communications software and services provider, moved to the downside in premarket trading on Friday.

The negative stock reaction comes after Mizuho Securities downgraded the stock from ‘Outperform’ to ‘Neutral,’ with an unchanged price target of $42, TheFly reported. Analyst Siti Panigrahi attributed his tempered opinion to downside risks to 2025 estimates. 

The analyst said RingCentral’s recent announcement that RingCX, its internally developed contact center as a service solution designed for small businesses, will be its prioritized contact center solution for all use cases going forward is a meaningful change.

He noted that the contact center as a solution (CCaaS) has so far been accretive to RingCentral’s growth, thanks to the company’s partnership with Israeli cloud platform provider NICE Ltd. ($NICE).

Panigrahi said the future of the NICE partnership is now in question, which poses risks to the 2025 subscription revenue growth estimate. The analyst also expressed concerns about the absence of any catalysts for revenue re-acceleration.

RingCentral’s fiscal third-quarter 2025 results released in early November showed 10% subscription revenue growth to $583 million, or roughly 96% of the total revenue. 

CEO Vlad Shmunis attributed the above-consensus revenue to continued momentum with new products, especially RingCX, and strength in its core unified communication as a service (UCaaS) market. 

RNG sentiment and message volume December 13, 2024, premarket as of 7:31 am ET | Source: Stocktwits

On Stocktwits, sentiment toward RingCentral stock flipped from ‘bearish’ a day ago to ‘bullish’ (58/100). 

In premarket trading, as of 7:31 a.m. ET, RingCentral stock declined 1.28% to $40.82. The stock has gained about 22% this year.

According to data compiled by TipRanks, the average analysts’ price target for the stock is $40.29, which is down over 2% from current levels. 

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