RingCentral (RNG) stock jumped 14.8% after hours on Thursday to about $91 after the company beat third-quarter estimates and raised every line of its full-year outlook. Revenue grew 5.9% to $676 million, and adjusted EPS of $1.33 topped the $1.27 consensus.
The beat was real. The size of the reaction is the story: the stock has climbed 91.4% in six months, while the full-year free cash flow guide has moved $5 million since July.
What RingCentral Reported
- Margins: non-GAAP operating margin of 24.7%, up about 190 basis points.
- Cash: free cash flow of $157 million, 23.2% of revenue.
- Guidance: full-year free cash flow now $620 million to $630 million, up from $615 million to $625 million.
- Debt: gross debt down to about $1 billion, its target, reached early.
- AI: customers using a paid AI product account for nearly 15% of ARR. That counts those customers’ full ARR, not AI product revenue alone.
RingCentral Stock Now Pays for More Than the Numbers
Thursday’s after-hours move added about $1 billion of market value against guidance raises of $13 million in revenue and $5 million in free cash flow at the midpoints.
The NTM EV/EBITDA multiple closed Thursday at 10.59x, double its low of 5.08x, and the after-hours price takes it to roughly 12x on unchanged estimates. Buybacks also slowed to $18 million in the quarter against $66.3 million of stock compensation, and fourth-quarter guidance assumes 88.7 million diluted shares, up from 87.7 million.
Revenue grew 6%, while adjusted EPS rose about 18% and free cash flow increased 21%. The forward EV/EBITDA multiple roughly doubled from its low.
TIKR Tracks 15 Analysts on RingCentral. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on RingCentral, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See RingCentral’s Analyst Ratings
The Street Is Still Chasing RingCentral
The mean target is $57.64, up from about $45 in July, when RingCentral jumped 25% on its last report. Thursday’s $79.42 close already sat 38% above it, and the after-hours price sits about 58% above.
At about $91, RingCentral trades near 12.8x this year’s free cash flow guide ($625 million at the midpoint, or about $7.14 a share), which isn’t expensive in absolute terms. But the price now needs growth well above 6%, and management held back 2027 guidance on Thursday. If that outlook keeps revenue growth near 6%, the stock is priced for an acceleration it hasn’t shown yet.
So what is RingCentral stock actually worth?
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