RingCentral (RNG) Stock Falls Despite Beating Expectations for Q4

RingCentral Inc. (NYSE:RNG) was founded in 1999 by Vlad Shmunis and Anand Eswaran with the aim to revolutionize the business communication space with the help of cloud technologies. Its services and solutions allow individuals and businesses to communicate and connect from anywhere they want. Today, RingCentral is regarded as a leading provider of cloud communications and serves thousands of customers globally.

The company went public in September 2013 by selling 7.5 million shares at $13. RingCentral stock did not gain much value during the initial few years after going public. However, the stock has been doing great lately. RNG’s stock value climbed more than 120 percent in 2020 alone, as demand for its services increased during the Covid-19 crisis.

RingCentral on Tuesday delivered another solid quarter with an upbeat outlook. The company reported adjusted earnings of 29 cents per share for the fourth quarter, up from 22 cents per share in the comparable period of 2019, and above the consensus forecast of 27 cents per share. Revenue jumped 32 percent on a year-over-year basis to $335 million, easily beating analysts’ average estimate of $317.4 million.

Speaking on the results, CEO Vlad Shmunis said in a statement, “Fourth quarter was outstanding, driven by robust growth across the business with strong contributions from the channel and our key partners led by Avaya, AT&T, and Atos.”

RingCentral also provided an upbeat financial outlook for the first quarter. It expects to report an adjusted profit in the range of 24-25 cents per share and revenue between $337 million and $340 million for the current quarter. On the other hand, analysts on average expect the company to report adjusted earnings of 23 cents per share on revenue of $329.7 million.

RingCentral shares fell more than 4 percent in the mid-day trading Wednesday despite posting better-than-expected results for the fourth quarter.