RingCentral, Inc. Fundamental Analysis (NYSE: RNG)
RingCentral, Inc. (NYSE: RNG) shows moderate financial fundamentals with a PE ratio of 10.71, profit margin of 25.27%, and ROE of -1.63%. The company generates $2.3B in annual revenue with moderate year-over-year growth of 4.78%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -126.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RNG's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRNG demonstrates superior asset utilization.
Valuation Score
ExcellentRNG trades at attractive valuation levels.
Growth Score
WeakRNG faces weak or negative growth trends.
Financial Health Score
ModerateRNG shows balanced financial health with some risks.
Profitability Score
ModerateRNG maintains healthy but balanced margins.
Key Financial Metrics
Is RNG Expensive or Cheap?
P/E Ratio
RNG trades at 10.71 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, RNG's PEG of 0.00 indicates potential undervaluation.
Price to Book
The market values RingCentral, Inc. at 37.60 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.43 times EBITDA. This signals the market has high growth expectations.
How Well Does RNG Make Money?
Net Profit Margin
For every $100 in sales, RingCentral, Inc. keeps $25.27 as profit after all expenses.
Operating Margin
Core operations generate 7.72 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-1.63 in profit for every $100 of shareholder equity.
ROA
RingCentral, Inc. generates $35.33 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
RingCentral, Inc. generates strong operating cash flow of $620.78M, reflecting robust business health.
Free Cash Flow
RingCentral, Inc. generates strong free cash flow of $601.73M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.16 in free cash annually.
FCF Yield
RNG converts 11.13% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.71
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.002
vs 25 benchmark
P/B Ratio
Price to book value ratio
37.60
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.36
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
5.52
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-1.63
vs 25 benchmark
ROA
Return on assets percentage
0.35
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How RNG Stacks Against Its Sector Peers
| Metric | RNG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.71 | 33.86 | Better (Cheaper) |
| ROE | -163.48% | 863.00% | Weak |
| Net Margin | 25.27% | -1938.00% (disorted) | Strong |
| Debt/Equity | 5.52 | 0.61 | Weak (High Leverage) |
| Current Ratio | 1.06 | 12.88 | Neutral |
| ROA | 35.33% | 99.00% | Weak |
RNG outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews RingCentral, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
118.85%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
153.85%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
1907.03%
Industry Style: Growth, Innovation, High Beta
High Growth