RingCentral Inc’s (NYSE:RNG): RingCentral, Inc. provides software-as-a-service solutions for business communications and collaboration primarily in the United States. With the latest financial year loss of -US$26.14m and a trailing-twelve month of -US$26.62m, the US$6.06b market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which RNG will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for RNG, its year of breakeven and its implied growth rate.View out our latest analysis for RingCentral
Expectation from Software analysts is RNG is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . So, RNG is predicted to breakeven approximately a few months from now. How fast will RNG have to grow each year in order to reach the breakeven point by ? Working backwards from analyst estimates, it turns out that they expect the company to grow 15.84% year-on-year, on average, which seems relatively fair. However, if this rate turns out to be too buoyant, RNG may become profitable later than analysts predict.
Given this is a high-level overview, I won’t go into details of RNG’s upcoming projects, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. RNG currently has a debt-to-equity ratio of 129.24%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in RNG’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are key fundamentals of RNG which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at RNG, take a look at RNG’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should further research:
- Valuation: What is RNG 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 RNG is currently mispriced by the market.
- 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 back ground.
- 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.