We Might See A Profit From RingCentral, Inc. (NYSE:RNG) Soon

RingCentral, Inc. (NYSE:RNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. RingCentral, Inc., together with its subsidiaries, provides cloud business communications, contact center, video, and hybrid event solutions in North America and internationally. The US$2.4b market-cap company announced a latest loss of US$58m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is RingCentral's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for RingCentral

According to the 19 industry analysts covering RingCentral, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$40m in 2025. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 49% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving RingCentral's growth isn’t the focus of this broad overview, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. RingCentral currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on RingCentral, so if you are interested in understanding the company at a deeper level, take a look at RingCentral's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Valuation: What is RingCentral worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether RingCentral is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on RingCentral’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.