January 11, 2024
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 January 11, 2024 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for RingCentral on January 11, 2024.
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° View RingCentral Hold
| 360 METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 51 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 23 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 14 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 26 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock RingCentral are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for RingCentral. The consolidated Value Rank has an attractive rank of 94, which means that the share price of RingCentral is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 94% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 51, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 14. Professional investors are more confident in 86% other stocks. Worryingly, the company has risky financing, with a Safety rank of 23. This means 77% of comparable companies have a safer financing structure than RingCentral. ...read more
RECOMMENDATION: With a consolidated 360° View of 26, RingCentral is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 94 and the Growth Rank above-average at 51, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 14. In addition, the company financing structure is on the riskier side (Safety Rank of 23). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for RingCentral negative
ANALYSIS: With an Obermatt Sentiment Rank of 14 (better than 14% compared with alternatives), overall professional sentiment and engagement for the stock RingCentral is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for RingCentral. Analyst Opinions are at a rank of 24 (worse than 76% 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 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in RingCentral. But the Professional Investors rank is low at 41, which means that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 31, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 69% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 14 (less encouraging than 86% compared with investment alternatives), RingCentral has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: RingCentral Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2024, 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 (a 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 94, is a 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 good
ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), RingCentral shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. 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 69 (better than 69% of its competitors), and Capital Growth, with a rank of 73, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Stock Returns are at a rank of 33. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy 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 | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 3 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 75 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% 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 75, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. But Leverage is high with a rank of 3, meaning the company has an above-average debt-to-equity ratio. It has more debt than 97% 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 a consolidated Safety Rank of 23 (worse than 77% 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 an investment decision. ...read more
Combined financial peformance: RingCentral Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 51 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 15 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 65 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 65 (better than 65% compared with investment alternatives), RingCentral (Application Software, USA) shares have above-average financial characteristics compared with similar stocks. Shares of RingCentral are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives), show above-average growth (Growth Rank of 51) but are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 65, is a buy recommendation based on RingCentral's financial characteristics. As the company RingCentral's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 94) and above-average growth (Obermatt Growth Rank of 51), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 23) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.