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RingCentral price target lowered to $60 from $110 at Craig-Hallum
The Fly

RingCentral price target lowered to $60 from $110 at Craig-Hallum

Craig-Hallum analyst George Sutton lowered the firm’s price target on RingCentral to $60 from $110 and keeps a Buy rating on the shares. Growing concerns over profitability and the debt burden were met head-on with 220bps of operating margin expansion this quarter and plans to expand margins by at least 350bps in 2023, the analyst notes. Given that RingCentral has only generated modest free cash flow so far, the $1.6B in convertible debt, which matures in 2025 and 2026, has served as a material overhang for the stock, he adds, noting that the demonstrated margin expansion this quarter, combined with the dedication to growing profitability, should help alleviate investor concerns, especially considering the announced 10% reduction in workforce to realign the cost structure should help jump-start the process.

Published first on TheFly

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