Analysts’ expectations for the coming year seems relatively unexciting, with earnings continuing to flop around in the negative territory, generating -US$25.35M in 2019. Furthermore, earnings should fall further in the following year, before bouncing back up again to -US$11.04M in 2021.
Although it’s useful to be aware of the growth year by year relative to today’s figure, it may be more beneficial evaluating the rate at which the earnings are growing on average every year. The benefit of this method is that we can get a bigger picture of the direction of RingCentral’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 6.70%. This means, we can anticipate RingCentral will grow its earnings by 6.70% every year for the next few years.
Next Steps:
For RingCentral, I’ve compiled three key aspects you should further examine:
- 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- 2. Valuation: What is RNG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RNG is currently mispriced by the market.
- 3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RNG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!