Episode
RingCentral Stock: It Beat, RAISED, and Popped 25% — Here’s Why We Still Say BUY
- Published
- Jul 25, 2026
- Duration seconds
- 853
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Summary
RingCentral (RNG) Q2 2026 — RingCentral (RNG), the cloud-communications pioneer pivoting to AI-powered customer engagement, reported a clean Q2 2026 beat above the high end of its own guidance: non-GAAP EPS of $1.22 beat the ~$1.16 estimate (+15% YoY) on revenue of $657M (+5.9%), with subscriptions revenue of $634M (96% of total). Non-GAAP operating margin expanded to 23.4% and free cash flow jumped 25% to $180M (a 27% cash margin). Management RAISED full-year guidance across the board — total revenue to $2.635–2.646B, non-GAAP EPS to $4.96–$5.10, free cash flow to $615–625M — hiked the dividend 67% to $0.125/quarter, and refinanced ~$600M+ of convertible notes. The stock ripped ~25% to ~$48.31 (a new 52-week high, off a $23.59 low). Even after the pop it trades near ~10x forward earnings at a mid-teens FCF yield. Our owner-earnings DCF pegs fair value near $60 — even a melting-ice-cube case (~$53) tops the price. Our call: BUY, 4/5. RingCentral (RNG) is a stock the market left for dead — a deeply profitable, cash-gushing cloud-communications company priced for slow death. Q2 2026 challenged that thesis hard: non-GAAP EPS of $1.22 beat the ~$1.16 estimate (+15% YoY) on revenue of $657M (+5.9%), subscriptions revenue of $634M (96% of total, ~6% growth), non-GAAP operating margin up 90bps to 23.4%, and free cash flow up 25% to $180M (a 27% cash margin). Management RAISED full-year guidance on revenue, margins, and cash (total revenue $2.635–2.646B, non-GAAP EPS $4.96–$5.10, FCF $615–625M), hiked the dividend 67%, refinanced $600M+ of convertible notes, and bought back $94M of stock — and the shares ripped ~25% to ~$48.31, a new 52-week high off a $23.59 low. The bull case: a 96%-recurring cash machine at ~10x earnings and a mid-teens free-cash-flow yield, shrinking its s…