Market Overview

Google, Amazon Among Speculated Buyers If RingCentral M&A Rumors Are True

Share:
Google, Amazon Among Speculated Buyers If RingCentral M&A Rumors Are True
Related RNG
40 Biggest Movers From Yesterday
34 Stocks Moving In Tuesday's Mid-Day Session
RingCentral in Spanish deal with Intelligence Partner (Seeking Alpha)
Related GOOGL
Box Inc Is A Buy On Sustained Growth, Favorable Competitive Trends, Says DA Davidson
Q4 13F Roundup: How Buffett, Einhorn, Loeb, And Others Adjusted Their Portfolio
Nasdaq Erases Gain As Dow, S&P 500 Head For First Losses In 7 Days (Investor's Business Daily)

Baird Equity Research lowered its rating for RingCentral Inc (NYSE: RNG) from Outperform to Neutral after the stock jumped 8.08 percent Wednesday on an unsubstantiated M&A rumor.

The Baird analysts, William V. Power and Charles Erlikh, believe the risk-reward is now fair and the most likely M&A upside could be $44. Without M&A, they see the fair value at $41, which is a slight premium to the SaaS group. They are positive on the operating momentum and long-term positioning.

Bloomberg reported Wednesday morning that RingCentral is working with advisors to consider an offer for the company and the Baird analysts believe that any larger cloud company could be a buyer. They named Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), Oracle Corporation (NYSE: ORCL) and Amazon.com, Inc. (NASDAQ: AMZN) as potential candidates.

Related Link: Benzinga's Top Upgrades, Downgrades For August 10, 2017

The $41 price target is based on 5.5 multiple of 2018 software revenue forecast, which is slightly above the sector, while the $44 price target is based on 6multiple of 2018 software revenue forecast. The 6 multiple puts the company in line with high growth SaaS group. The Baird Equity Research analysts believe the stock could drop to mid-30 levels, if the M&A doesn't happen. They see other potential M&A targets in 8x8, Inc. (NASDAQ: EGHT) and Vonage Holdings Corp. (NYSE: VG).

Latest Ratings for RNG

DateFirmActionFromTo
Feb 2018Bank of AmericaMaintainsBuyBuy
Feb 2018JP MorganMaintainsNeutralNeutral
Feb 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for RNG
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings News Downgrades Rumors Price Target M&A Analyst Ratings Best of Benzinga

 

Related Articles (AMZN + EGHT)

View Comments and Join the Discussion!