My all time biggest winner Ringcentral (RNG) is reporting today pm. This outstanding company is the leader and pure play in the cloud UCAAS space.
A subscriber to Bert’s outstanding service, i had an email exchange with him a year ago asking about RNG. He politely replied he had not looked into the company and saw the UCAAS space as too competitive. The stock has since doubled to $208. Point is, this is a consistent 30%+ revenue grower and increasingly profitable company with nice 76% gross margins that has stayed under the radar of our favorite gurus.
I first bought the stock after Dan Niles pumped it in a 2014 CNBC interview and got me interested. Took a hefty stake at $15 but have since trimmed 2/3 as price has escalated to the moon. Haven’t seen a word from Niles on it since.
The CEO Vladimir G. Shmunis has exceeded every single commitment every quarter along the way and RNG is now poised to exceed its $1 billion thoroughly publicised revenue goal for 2020 (set 4 years ago) and in the last conference call said $3 billion was in the future. He has not yet offered a time frame on the $3B yet but i expect it soon, given his track record.
I discussed RNG’s superb growth accelerating deal with AVYA a few months ago. Unable to shake my innate value instincts, the stock is finally reaching multiples that we might consider on the high side for a 30% grower at about 15X 2020 revenue. I expect a modest beat today with more color on how the AVYA deal will impact future revenue.
If outlook is encouraging for accelerating growth tonight as i expect, RNG should continue to roll.
Competition is out there, of course. A big guy is Vonage, the publicly traded EGHT which has not executed well in recent years, and a tiny private upstart Nextiva which is realizing exploding growth.
So far, nothing has slowed RNG down.
They may have a bit of a frenemy relationship with Zoom for the video conferencing piece of the RNG package and i am keeping an eye on that, i.e. to see if ZM encroaches into the rest of their space.