RingCentral ( NYSE: RNG ) shares rose 2% early trading Monday in spite of MKM Partners analyst Catharine Trebnick lowering her rating on the cloud-based business communications company due the the lack of catalysts to spur new revenue growth.
Trebnick cut her rating on RingCentral ( RNG ) to neutral from buy, and also set a "fair" value estimate on the company's stock to $40 a share and said, in effect, that the deck is stacked against the company regarding its ability to get revenue growing at a 30% annual clip.
"We do not see any near-term or mid-term catalyst," Trebnick said, regarding RingCentral's ( RNG ) growth outlook. "The competitive landscape is more crowded, and partner growth is not accelerating."
Trebnick added that RingCentral ( RNG ) "faces challenges with software development deliverables" among service providers who have no problem with delaying the launch of a cloud-based unified communications system if, for some reason, the software system isn't complete.
Additionally, Trebnick said that pressure from Microsoft ( MSFT ) Teams "will increase as organizations look to consolidate [software] suppliers" in the current economic environment.
Wall Street analysts and Seeking Alpha authors for have consensus buy ratings on RingCentral's ( RNG ) stock, while Seeking Alpha's Quant System, which historically outperforms the stock market, give RingCentral ( RNG ) a rating of hold .
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RingCentral shares rise 2% despite MKM rating cut