RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
RiverPark Large Growth Fund, in its Q4 2021 investor letter, mentioned RingCentral, Inc. (NYSE: RNG) and discussed its stance on the firm. RingCentral, Inc. is a Belmont, California-based cloud communications solutions provider with a $15.0 billion market capitalization. RNG delivered a -13.80% return since the beginning of the year, while its 12-month returns are down by -60.34%. The stock closed at $161.49 per share on February 4, 2022.
Here is what RiverPark Large Growth Fund has to say about RingCentral, Inc. in its Q4 2021 investor letter:
“RingCentral: Despite reporting strong and accelerating revenue growth and profitability throughout the year, RNG shares sold off on concerns of increased competition from Zoom and Microsoft. We believe RingCentral’s partnerships, including with Avaya, Atos, Alcatel, Vodafone, and most recently Mitel provide a sales advantage to help drive 30%+ revenue growth for the next five years. For its 3Q21, RNG reported key metrics above the high-end of its guidance—subscription revenue grew 38%, annual recurring revenue growth accelerated to 42%, total revenue grew 37% and RNG’s 10.5% Non-GAAP Operating margin exceeded guidance by 50 basis points. Management also again raised 2021 subscription revenue growth guidance to 32%.
RingCentral is the largest and fastest growing pure play Unified Communications as a Service (UCaaS) vendor. Traditionally, business communications have been comprised of on-premises hardware-based private branch exchanges (PBX), which primarily support voice-only desktop phones. These systems do not support employees who now communicate from anywhere with any device, using voice, video, text, messaging, and social media. UCaaS encompasses solutions addressing all these needs in a capital and labor light model for customers. RNG is the UCaaS market leader with two million users in an extremely fragmented market and is growing rapidly. The company started in the small-and-medium business market and has migrated to also serving larger enterprises, helped by new channel partnerships. The company’s increasing scale from its growing recurring revenue should improve operating margins, allowing the company to achieve its long-term target of 20%-25%.”
Our calculations show that RingCentral, Inc. (NYSE: RNG) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. RNG was in 48 hedge fund portfolios at the end of the third quarter of 2021, compared to 47 funds in the previous quarter. RingCentral, Inc. (NYSE: RNG) delivered a -31.02% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on RNG in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
