RingCentral, Inc. Fundamental Analysis (NYSE: RNG)
RingCentral, Inc. (NYSE: RNG) shows weak financial fundamentals with a PE ratio of 47.67, profit margin of 4.27%, and ROE of -20.59%. The company generates $2.6B 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 46.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RNG's fundamental strength across five key dimensions:
Efficiency Score
WeakRNG struggles to generate sufficient returns from assets.
Valuation Score
ModerateRNG shows balanced valuation metrics.
Growth Score
WeakRNG faces weak or negative growth trends.
Financial Health Score
ExcellentRNG maintains a strong and stable balance sheet.
Profitability Score
WeakRNG struggles to sustain strong margins.
Key Financial Metrics
Is RNG Expensive or Cheap?
P/E Ratio
RNG trades at 47.67 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RNG's PEG of 0.02 indicates potential undervaluation.
Price to Book
The market values RingCentral, Inc. at -8.50 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 12.06 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 $4.27 as profit after all expenses.
Operating Margin
Core operations generate 6.94 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-20.59 in profit for every $100 of shareholder equity.
ROA
RingCentral, Inc. generates $7.98 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 $692.52M, reflecting robust business health.
Free Cash Flow
RingCentral, Inc. generates strong free cash flow of $686.28M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.96 in free cash annually.
FCF Yield
RNG converts 12.64% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
47.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
-8.50
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.05
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-2.20
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.11
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.21
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How RNG Stacks Against Its Sector Peers
| Metric | RNG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 47.67 | 36.46 | Worse (Expensive) |
| ROE | -20.59% | 679.00% | Weak |
| Net Margin | 4.27% | -129189.00% (disorted) | Weak |
| Debt/Equity | -2.20 | 0.43 | Strong (Low Leverage) |
| Current Ratio | 1.11 | 5.89 | Neutral |
| ROA | 7.98% | 242.00% | Weak |
RNG outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
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