RingCentral (NYSE:RNG) Shares Down 4.4% - Here's Why

Key Points

• RingCentral shares fell 4.4% in midday trading to about $64.81, with trading volume down 95% from the average session.
• Analysts remain cautious overall: three rate the stock a Buy and eight a Hold, resulting in a consensus Hold rating and a $44.40 price target.
• RingCentral exceeded quarterly earnings and revenue expectations, while raising its quarterly dividend from $0.07 to $0.125 per share; institutional investors own 98.61% of the stock.

RingCentral, Inc. (NYSE:RNG - Get Free Report)'s stock price dropped 4.4% during mid-day trading on Friday . The stock traded as low as $64.53 and last traded at $64.8080. 99,337 shares were traded during trading, a decline of 95% from the average session volume of 2,124,397 shares. The stock had previously closed at $67.78.

Wall Street Analyst Weigh In

A number of research firms have recently commented on RNG. Needham & Company LLC reiterated a "buy" rating on shares of RingCentral in a report on Monday, July 20th. Rosenblatt Securities restated a "buy" rating and set a $50.00 target price on shares of RingCentral in a research note on Friday, July 24th. Mizuho increased their price target on shares of RingCentral from $38.00 to $40.00 and gave the company a "neutral" rating in a research note on Friday, July 24th. Wells Fargo & Company increased their price target on shares of RingCentral from $32.00 to $43.00 and gave the company an "equal weight" rating in a research note on Friday, May 8th. Finally, Piper Sandler raised their price objective on shares of RingCentral from $40.00 to $43.00 and gave the stock a "neutral" rating in a report on Friday, July 24th. Three research analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Hold" and a consensus target price of $44.40.

RingCentral Stock Down 4.1%

• It's RingCentral NYSE: RNG You Want In Your 2021 Portfolio, Not Zoom NASDAQ: ZM

The firm has a fifty day simple moving average of $45.02 and a 200-day simple moving average of $40.02. The company has a market cap of $5.43 billion, a PE ratio of 51.89, a price-to-earnings-growth ratio of 1.09 and a beta of 1.10.

RingCentral (NYSE:RNG - Get Free Report) last posted its earnings results on Thursday, July 23rd. The software maker reported $1.22 EPS for the quarter, topping analysts' consensus estimates of $1.16 by $0.06. The business had revenue of $657.01 million for the quarter, compared to analysts' expectations of $650.53 million. RingCentral had a negative return on equity of 34.49% and a net margin of 4.27%.The business's revenue was up 5.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $1.06 earnings per share. RingCentral has set its FY 2026 guidance at 4.960-5.100 EPS and its Q3 2026 guidance at 1.250-1.300 EPS. Equities research analysts forecast that RingCentral, Inc. will post 2.88 earnings per share for the current fiscal year.

RingCentral Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, August 20th. Shareholders of record on Thursday, August 6th will be paid a $0.125 dividend. This is an increase from RingCentral's previous quarterly dividend of $0.07. This represents a $0.50 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, August 6th. RingCentral's dividend payout ratio (DPR) is presently 40.00%.

Insiders Place Their Bets

In other news, COO Kira Makagon sold 16,988 shares of RingCentral stock in a transaction on Wednesday, May 27th. The shares were sold at an average price of $42.54, for a total value of $722,669.52. Following the transaction, the chief operating officer directly owned 212,724 shares of the company's stock, valued at $9,049,278.96. The trade was a 7.40% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Tarun Arora sold 3,615 shares of the company's stock in a transaction on Friday, May 29th. The shares were sold at an average price of $43.00, for a total transaction of $155,445.00. Following the completion of the sale, the chief accounting officer owned 68,100 shares of the company's stock, valued at approximately $2,928,300. This trade represents a 5.04% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders sold 38,628 shares of company stock valued at $1,656,201. 7.30% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of RNG. Commonwealth of Pennsylvania Public School Empls Retrmt SYS acquired a new stake in shares of RingCentral during the first quarter worth $697,000. Robertson Stephens Wealth Management LLC increased its stake in RingCentral by 124.7% in the 4th quarter. Robertson Stephens Wealth Management LLC now owns 90,311 shares of the software maker's stock valued at $2,608,000 after buying an additional 50,122 shares during the period. LSV Asset Management raised its position in RingCentral by 142.4% during the 4th quarter. LSV Asset Management now owns 2,871,700 shares of the software maker's stock worth $82,935,000 after buying an additional 1,686,900 shares during the last quarter. Jupiter Asset Management Ltd. raised its position in RingCentral by 11.4% during the 4th quarter. Jupiter Asset Management Ltd. now owns 1,456,270 shares of the software maker's stock worth $42,057,000 after buying an additional 149,532 shares during the last quarter. Finally, Harel Insurance Investments & Financial Services Ltd. lifted its stake in shares of RingCentral by 60.0% in the 4th quarter. Harel Insurance Investments & Financial Services Ltd. now owns 280,323 shares of the software maker's stock worth $8,096,000 after acquiring an additional 105,145 shares during the period. 98.61% of the stock is owned by hedge funds and other institutional investors.

About RingCentral

RingCentral, Inc is a leading provider of cloud-based business communications and collaboration solutions. The company’s flagship platform delivers unified communications as a service (UCaaS), integrating voice over IP (VoIP) phone systems, video conferencing, team messaging and SMS into a single, cloud-native application. In addition to its UCaaS offering, RingCentral provides contact center as a service (CCaaS) capabilities, enabling organizations to manage customer interactions across voice, email, chat and social channels from a centralized dashboard.

Founded in 1999 and headquartered in Belmont, California, RingCentral went public on the New York Stock Exchange under the ticker RNG in 2013.

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