| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 51 | 55.1x | 17.8x | Around median | |
Growth | 75 | 5.2% | 7.1% | Top tier | |
Quality | 97 | 23.7% | 4.5% | Top tier | |
Safety | 58 | 2.1x | 2.6x | Around median | |
Capital Return | 85 | — | 2.12% | Top tier | |
Momentum | 96 | 105.2% | 2.9% | Top tier | |
Sentiment | 44 | 10 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
RingCentral provides a cloud communications and customer engagement platform that combines voice, messaging, video, and artificial intelligence. Its portfolio includes RingEX for cloud telephony, RingCX and RingWEM for contact centers, the Customer Engagement Bundle for informal contact centers, and the RCAI portfolio, which includes AIR, AIR Pro, AVA, and ACE. Its revenue model relies heavily on subscriptions; in Q1 FY2026, subscription revenue was $623 million out of total revenue of approximately $644 million, or about 96.7%, while monthly net retention was above 99%.
In Q2 FY2026, RingCentral reported revenue of $657.0 million, gross profit of $472.3 million, net income of $39.1 million, and earnings per share of $0.45. These results represent a gross margin of approximately 71.9% and a net income margin of approximately 6.0%, compared with revenue of $644.2 million and net income of $30.6 million in Q1 FY2026. On a FY2025 basis, the company generated revenue of $2.5 billion, gross profit of $1.8 billion, and net income of $43.4 million, highlighting the subsequent improvement in quarterly profitability.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $52.57, with a consensus Buy rating and a wide range between $40 and $85; the average is below the top of the 52-week range of $70.43, while the highest target exceeds that peak. No reported price-to-earnings ratio is available in the data, so the valuation depends more heavily on RingCentral's ability to convert RCAI growth into acceleration beyond the guided revenue growth range of 4.2% to 5.0%, while delivering its FY2026 free cash flow target of $590 million to $605 million.
Figures in the text are as of 2026-08-30; the live price is shown at the top of the page.
Artificial intelligence and customer engagement products are leading the fastest-growing part of the portfolio, as the number of paying AIR customers exceeded 11,800 by the end of Q1 FY2026, an increase of more than 40% quarter over quarter. The number of ACE customers exceeded 5,200, growing 85% year over year, while the number of RingCX customers exceeded 1,700, growing more than 70%. Nevertheless, total Q1 FY2026 revenue growth remained at 5.3%, and management is targeting growth of between 4.2% and 5.0% for the full FY2026.
The company reported net income of $39.1 million and earnings per share of $0.45 in Q2 FY2026, compared with net income of $30.6 million and earnings per share of $0.35 in the previous quarter. GAAP operating margin was 7.8% in Q1 FY2026, an improvement of more than 600 basis points year over year. Management is targeting an annual margin of between 8.9% and 9.6% in FY2026, compared with 4.8% in FY2025.
The products cover different stages of customer interaction; AIR and AIR Pro automate reception and workflows, AVA assists the employee during the conversation, and ACE analyzes conversations and provides training data after they end. The number of paying AIR customers exceeded 11,800 and the number of ACE customers exceeded 5,200 by the end of Q1 FY2026. Management reported on May 8, 2026 that customers using at least one artificial intelligence product represent more than 10% of the base and generate higher average revenue per user and net retention above 100%.
Management raised the total revenue range to between $2.62 billion and $2.64 billion, representing growth of between 4.2% and 5.0% in FY2026. It also raised the free cash flow forecast to between $590 million and $605 million, up 13% year over year, and set non-GAAP earnings per share at between $4.85 and $5.01. The guidance includes a non-GAAP operating margin of between 23.3% and 23.7%, and a GAAP margin of between 8.9% and 9.6%.
Management identified three primary uses of cash on May 8, 2026: funding innovation, reducing debt, and returning capital to shareholders. During Q1 FY2026, the company reduced debt by approximately $46 million, repurchased approximately 2.5 million shares for $81 million, and paid its first quarterly dividend of $0.075 per share. Remaining repurchase authorization was approximately $418 million, while the company is targeting a reduction in total debt to $1 billion by the end of FY2026.
The first obstacle is that the new products are growing from a smaller base, while total revenue growth remained at 5.3% in Q1 FY2026. Management indicated on May 8, 2026 that pricing was being rationalized for large customers and that some pandemic-period contracts were being repriced upon renewal, which could restrain revenue growth. The expansion of RCAI's contribution through global service providers was also described as being more closely associated with FY2027 and FY2028, while artificial intelligence models and competition continue to evolve rapidly.
