Shares of RingCentral (NYSE:RNG) nosedived today, which can be attributed to an analyst downgrade on top of weak revenue and guidance. Revenue increased year-over-year by 17.2% to hit $525 million. This missed expectations by almost $3 million. Looking ahead, management expects revenue to be in the range of $526 million to $530 million. For reference, analysts were expecting $545 million,
As a result, Peter Levine of Evercore ISI changed his rating from Buy to Hold while maintaining a price target of $40 per share. Levine is concerned about the “lack of catalysts on the horizon,” suggesting that the current valuation still isn’t good enough for investors to get excited about. He also pointed out that 2023 will see a lot of customers shopping around for better deals as they try to reduce the number of vendors due to macroeconomic headwinds. Thus, there is still more risk to come.
Overall, Wall Street analysts have a consensus price target of $47.91 on RNG stock, implying over 20% upside potential, as indicated by the graphic above.