RNG Set to Report Q1 Earnings: What's in the Cards for the Stock?

RingCentral RNG is scheduled to report first-quarter 2025 results on May 8.

RNG expects total revenues between $607 million and $612 million for the first quarter, indicating year-over-year growth of 4-5% on a reported and constant-currency basis. Non-GAAP earnings are expected to be 93-97 cents per share for the first quarter of 2025.

The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $610.74 million, suggesting 4.54% growth over the figure reported in the year-ago quarter.

The consensus mark for first-quarter 2025 earnings is pegged at 96 cents per share, unchanged over the past 30 days. This indicates 10.34% year-over-year growth.

Ringcentral, Inc. Price and EPS Surprise

 

Ringcentral, Inc. price-eps-surprise | Ringcentral, Inc. Quote

RingCentral’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 4.38%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let us see how things have shaped up for the upcoming announcement.

Factors to Note for RNG Ahead of Q1 Results

RingCentral’s first-quarter 2025 performance is likely to have been impacted by ongoing competitive pressures, especially from Microsoft MSFT and Zoom Communications ZM. Persistent rhetoric around losing market share to Microsoft and Zoom in the cloud communications space is anticipated to have hurt the company in the quarter under review.

Despite competitive pressure, RingCentral’s 20% share in the UCaaS market suggests it remains a key player, even as Microsoft and Zoom gain ground.

Sluggish enterprise IT spending, driven by broader macroeconomic headwinds, is expected to have weighed on RingCentral’s first-quarter 2025 results. This softness in the broader spending environment is anticipated to have hurt RNG’s first-quarter 2025 performance.

RingCentral’s top-line growth for the first quarter of 2025 is expected to have been affected by its aggressive pricing strategies across the market, which likely limited its ability to drive meaningful revenue expansion amid intensifying market competition.

The company’s first-quarter 2025 gross and operating margins are expected to have come under pressure from increased investment in artificial intelligence and product development. The expenditure, though aligned with long-term growth priorities, likely limited margin expansion in the short term.

The success of RingCentral’s multi-product approach is expected to have bolstered the company’s performance in the quarter under review, with products such as RingCentral CX and RingCentral Events playing key roles in driving customer engagement and business expansion.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the exact case here.

RingCentral currently has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stock to Consider

Here is a company worth considering, as our model shows that this has the right combination of elements to beat on earnings in its upcoming release:

StoneCo STNE has an Earnings ESP of +6.25% and presently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

STNE is scheduled to release its first-quarter 2025 results on May 08. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 32 cents per share, suggesting year-over-year growth of 10.34%.

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This article originally published on Zacks Investment Research (zacks.com).

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