Wedbush initiates RingCentral with a Neutral and $40 price target

As previously reported, Wedbush analyst Taz Koujalgi initiated coverage of RingCentral with a Neutral rating and a price target of $40. The analyst notes the company is seeing a year-over-year decline in new bookings for the past couple of quarters, and his analysis shows that sales productivity has been declining. Koujalgi worries about the trajectory going forward given the decline in sales productivity and we fear that headcount reduction could create further pressure on new business growth. He is also concerned that 2023 Street numbers appear a bit high, and there is a risk that RingCentral could guide below the Street.