RingCentral plunges 22% as Evercore cuts following weak revenue, outlook
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RingCentral (NYSE:RNG) shares fell more than 22% in mid-day trading on Thursday as the cloud communications software company reported mixed fourth-quarter results and a weak outlook, prompting investment firm Evercore to downgrade the stock.
Analyst Peter Levine lowered his rating on RingCentral (RNG) shares to in-line from outperform, pointing out it saw a "budget flush" during the fourth-quarter, as well as extending deal cycles and smaller deployments towards the end of the year. 
"While valuation at these levels would appear to be washed out, from our perspective there is no real catalyst on the horizon," Levine wrote in a note to clients.
Levine also noted the threat of Microsoft (MSFT) and Zoom (ZM) are not going away and while the company is increasing its focus on margins, cash flow, diluting the stock and conversion, it's not enough to be constructive on the stock. 
He also pointed out there is "a lot more risk" over the next couple of quarters given that 2023 is a huge renewal year for RingCentral (RNG), especially given the economic uncertainty, which could cause customers to price shop and consolidate vendors.
For the first-quarter, RingCentral (RNG) expects sales to be between $526M and $530M, compared to estimates of $545M, along with an operating margin of 16.5%. 
For the full year, it sees total revenues of $2.18B-$2.2B, below the $2.33B analysts expect. 
RingCentral (RNG) also announced it's entered a five-year, $600M credit facility, including a $400M delayed draw term loan A and a $200M revolver.
Analysts are largely bullish on RingCentral (RNG). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates RNG a HOLD.