Stock Story -
What Happened?
Shares of office and call centre communications software provider RingCentral (NYSE:RNG) fell 6.8% in the afternoon session after Wells Fargo (NYSE:WFC) analyst downgraded the stock's rating from Hold to Sell and lowered the price target from $38 to $30. The new price target translates to a potential 10% downside from where shares traded before the downgrade was announced.The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RingCentral? Find out by reading the original article on StockStory, it’s free.
What The Market Is Telling Us
RingCentral’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.The biggest move we wrote about over the last year was 8 months ago when the stock gained 15.7% on the news that the company reported first quarter results that beat analysts' billings, revenue and EPS expectations. Its gross margin improved and free cash flow was solid. Looking ahead, revenue guidance for the next quarter came in roughly in line with Wall Street's expectations. Zooming out, we think this was a decent quarter, showing that the company is staying on target.
RingCentral is down 2.6% since the beginning of the year, and at $33.92 per share, it is trading 18.9% below its 52-week high of $41.82 from December 2024. Investors who bought $1,000 worth of RingCentral’s shares 5 years ago would now be looking at an investment worth $191.95.