June 1, 2023
Top 10 Stock RingCentral Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: RingCentral – Top 10 Stock in SDG 15: Life on Land
RingCentral is listed as a top 10 stock on June 01, 2023 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 40 (40% performer), Obermatt assesses an overall hold recommendation for RingCentral on June 01, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment RingCentral Hold
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| SENTIMENT | ||||||||
| SENTIMENT | 46 |
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| 360° VIEW | ||||||||
| 360° VIEW | 40 |
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ANALYSIS: With an Obermatt 360° View of 40 (better than 40% compared with alternatives), overall professional sentiment and engagement for the stock RingCentral are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for RingCentral. Only the consolidated Value Rank has an attractive rank of 92, which means that the share price of RingCentral is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 92% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 39, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 4, meaning the company has a riskier financing structure than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 54% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 46. ...read more
RECOMMENDATION: With a 360° View of 40, RingCentral is worse than 60% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 92. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 39), a riskier financing structure (Safety Rank of 4), and negative market sentiment in the professional investor community (Sentiment Rank of 46). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of RingCentral is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of RingCentral. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for RingCentral only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 46 (better than 46% compared with alternatives), overall professional sentiment and engagement for the stock RingCentral is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for RingCentral. Analyst Opinions are at a rank of 35 (worse than 65% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 95, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in RingCentral. More encouragingly, the Professional Investors rank is 70, which means that professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 19, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 81% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 46 (less encouraging than 54% compared with investment alternatives), RingCentral has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for RingCentral. While analysts and the news channels are negative, there is a change in what stock research analysts think. Above-average institutional investors in this company support them. While the sentiment signals remain mixed with analysts and news channels pessimistic, some analysts are optimistic, which is an encouraging sign for investing in this stock. ...read more
Value Strategy: RingCentral Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 92 (better than 92% compared with alternatives) for 2023, RingCentral shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for RingCentral. Price-to-Sales (P/S) is 85, which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value regarding RingCentral's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 94% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 97. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than RingCentral (an Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 92, is a strong buy recommendation based on RingCentral's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: RingCentral Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), RingCentral shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for RingCentral. Profit Growth, with a rank of 74 (better than 74% of its competitors), and Capital Growth, with a rank of 85, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 30, which means that, currently, professionals expect the company to grow less than 70% of its competitors, and Stock Returns are at a rank of 9. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a HOLD recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: RingCentral Debt Financing Safety risky
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 5 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
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ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company RingCentral has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of RingCentral is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for RingCentral and the other two below average. Refinancing is at 55, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. But Leverage is high with a rank of 5, meaning the company has an above-average debt-to-equity ratio. It has more debt than 95% of its competitors. Liquidity is also on the riskier side with a rank of 15, meaning the company generates less profit to service its debt than 85% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 4 (worse than 96% compared with alternatives), RingCentral has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for RingCentral are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making a financial decision. ...read more
Combined financial peformance: RingCentral Below-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), RingCentral (Application Software, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RingCentral are a good value (attractively priced) with a consolidated Obermatt Value Rank of 92 (better than 92% of alternatives) but show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 32, is a hold recommendation based on RingCentral's financial characteristics. As the company RingCentral's key financial metrics exhibit good value (Obermatt Value Rank of 92) but low growth (Obermatt Growth Rank of 39) and risky financing practices (Obermatt Safety Rank of 4), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 92% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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