Piper ups RingCentral target to $37 after weighing activist options

Piper Sandler analyst James Fish raised the firm’s price target on RingCentral (RNG) to $37 from $29 and keeps a Neutral rating on the shares. Following the 13-D filing of an activist shareholder in both RingCentral and 8×8 (EGHT), the analyst examined the potential path an activist could push for, including an 8×8 combination, leveraged buyout, strategic sale, and higher margin push. Insiders no longer have majority voting control at 49%, theoretically giving public holders the slight majority that makes change possible, the analyst tells investors in a research note. Piper thinks the strategic scenario that creates the best shareholder return and future positioning would be for RingCentral to directly enter the contact center as a service space via an acquisition or merger with 8×8. It keeps a Neutral rating on RingCentral given the company’s growth deceleration, competition, and lack of a CCaaS strategy.