FBN Securities raises RingCentral stock price target on AI growth

FBN Securities has increased its price target for RingCentral Inc. (NYSE:RNG) to $105 per share, up from $60, while keeping an "Outperform" rating. The upgrade stems from the company's strong third-quarter 2026 results, which saw an AI-driven annual recurring revenue of over $400 million, roughly double the previous year's amount and accounting for approximately 15% of total ARR.

The firm also highlighted a record 24.7% next-generation operating margin. RingCentral exceeded its fiscal 2026 revenue guidance, surpassing expectations in the third quarter. Despite concerns such as a higher share count in the fourth quarter and a slowdown in share buybacks, which kept earnings per share guidance in line with expectations, 12 analysts have recently revised their earnings estimates upward for the company, as per InvestingPro data.

The stock appears to be trading near its intrinsic value based on current levels. FBN Securities anticipates free cash flow per share to grow 23% year-over-year in fiscal 2026, reaching $7.15. Following the earnings report, RingCentral's shares traded at around $90.40 after-hours. The target price represents approximately 17.6 times the firm's fiscal 2028 next-generation EPS estimate of $5.96.

RingCentral's shares have rallied about 188% year-to-date before the earnings announcement. In related news, RingCentral reported third-quarter earnings surpassing Wall Street's profit expectations, with non-GAAP earnings of $1.33 per share compared to the forecast of $1.28. Although revenue was slightly below forecasts at $653 million against a forecast of $667.3 million.