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How RingCentral’s Soft Revenue Outlook Amid AI Competition Will Impact RingCentral (RNG) Investors

Simply Wall St · 1d ago
  • In the past week, RingCentral reported quarterly revenue of US$638.7 million, growing 4.9% year on year and meeting analyst expectations, but issued revenue guidance for the next quarter that fell well short of forecasts.
  • While management highlighted solid execution, expanding margins, and strong free cash flow, the weaker forward guidance raised fresh questions about the pace of RingCentral’s growth as AI-related investment and competition intensify.
  • Next, we’ll explore how RingCentral’s weaker-than-expected revenue guidance may reshape its investment narrative around AI-driven growth.

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RingCentral Investment Narrative Recap

To own RingCentral, you generally need to believe its AI powered communications suite can offset slowing top line growth and rising competition from bundled platforms. The latest quarter’s in line revenue and weaker guidance matter mainly because they temper near term optimism around AI driven acceleration, while the biggest current risk is that large customers standardize on integrated suites like Microsoft Teams or Zoom, reducing demand for RingCentral’s standalone offerings.

Among recent announcements, the updated Q4 2025 guidance around US$638 million to US$646 million in total revenue is most relevant, because it frames how quickly AI products like RingCX and RingSense might contribute against modest overall growth. With shares trading well below prior highs despite expanding margins and strong free cash flow, the tension between slower revenue expectations and the AI product story is increasingly central to the investment case.

But even with improving profitability, the threat of enterprises consolidating around bundled suites is something investors should be aware of as...

Read the full narrative on RingCentral (it's free!)

RingCentral's narrative projects $2.8 billion revenue and $219.0 million earnings by 2028. This implies an earnings increase from current levels to reach the consensus 2028 forecast of $219.0 million.

Uncover how RingCentral's forecasts yield a $33.24 fair value, a 12% upside to its current price.

Exploring Other Perspectives

RNG 1-Year Stock Price Chart
RNG 1-Year Stock Price Chart

Four fair value estimates from the Simply Wall St Community span roughly US$33 to almost US$98 per share, showing how far apart individual views can be. Against this backdrop of differing opinions, RingCentral’s softer revenue guidance and pressure from bundled competitors highlight why it may help to compare several perspectives before forming a view on the company’s long term potential.

Explore 4 other fair value estimates on RingCentral - why the stock might be worth just $33.24!

Build Your Own RingCentral Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.