RingCentral (RNG) Grows 5.1%: Is This An Indication Of Further Earnings?

RingCentral RNG shares climbed 5.1% in the last trading session to close at $ 228.69. The movement was supported by solid volume with a lot more action changing hands than in a normal session. This compares to the stock’s 14.9% loss over the past four weeks.

The recovery can be attributed to growing demand for enterprise Unified Communications as a Service (UCaaS) solutions and RingCentral Office amid the coronavirus-induced work-from-home wave. RingCentral benefited from strong growth in subscription revenues, driven by an expanding customer base.

This cloud-based small business phone system provider is expected to post quarterly profit of $ 0.27 per share in its next report, which is a year-over-year change of + 3.9%. Revenue is expected to reach $ 392.77 million, up 29.4% from the prior year quarter.

While earnings and income growth expectations are important in assessing a stock’s potential strength, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For RingCentral, the consensus estimate of EPS for the quarter has remained unchanged over the past 30 days. And the price of a stock usually does not continue to rise in the absence of a trend in revisions to earnings estimates. So be sure to keep an eye out for RNG going forward to see if that recent leap can turn into more force on the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the full list of today’s Zacks Rank # 1 (strong buy) stocks here >>>>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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