RingCentral Posts Strong Q1 and Moves Forward With a Focus on Profitable Growth; Maintain $275 FVE

Narrow-moat RingCentral reported strong first-quarter results that exceeded both the high-end of guidance and our at-FactSet consensus expectations for revenue and adjusted EPS. Management issued strong second-quarter guidance, and raised its full-year 2022 outlook, which we view as appropriate as the company generated a stellar pipeline in the first quarter, as well as strong bookings of around $100 million. As our model already contemplated upside and accelerating profitability, we are maintaining our fair value estimate of $275 per share. With shares trading at a significant discount to our fair value estimate, we currently see a highly attractive buying opportunity for investors.