RingCentral price target lowered to $38 from $40 at UBS

UBS lowered the firm’s price target on RingCentral (RNG) to $38 from $40 and keeps a Neutral rating on the shares. RingCentral’s operating margin and free cash flow guidance were both above the firm’s estimates, which were solid in light of concerns that upside to margins could start waning and will provide support for the multiple, the analyst tells investors in a research note. RingCentral’s multiple looks washed out for mid- to high-single-digit growth potential, but given the deceleration in key growth metrics, UBS says it would like more evidence that the large deal activity and AI-related sales are capable of supporting growth at these levels.