RingCentral‘s RNG shares have plummeted 27.6% in the year-to-date period compared with the Zacks Computer & Technology sector’s decline of 11.8%. The Internet - Software and Services have risen 4.5% in the same time frame.

RNG has underperformed its peers, including Microsoft MSFT, Zoom Communication ZM and Cisco Systems CSCO, which are also making advancements in AI-driven UCAAS communication technology. For instance, Microsoft has enhanced its Teams platform by integrating AI Assistant and Zoom Communication and Cisco Systems have rolled out ZOOM AI Companion and Cisco WEBEX AI, respectively. 

While shares of Microsoft and Zoom Communication each lost 9.3%, Cisco Systems shares gained 4.4%, outperforming RNG’s shares in the year-to-date period. The underperformance can be attributed to macroeconomic uncertainties, cautious enterprise spending, fierce competition and currency fluctuation.

However, RNG is benefiting from its strong AI-driven product adoption, increasing enterprise deals and expanding its multi-product portfolio, particularly with RingCX and RingSense.

Ringcentral, Inc. Price and Consensus

Ringcentral, Inc. price-consensus-chart | Ringcentral, Inc. Quote

Given RNG’s expanding portfolio, investors should ask this question: Is the dip the right time to invest in RNG shares?

RNG’s Prospects Ride on Strong AI Prowess

RingCentral’s focus on adding AI-supported features to its platforms has been a key catalyst.

In the fourth quarter of 2024, RingCentral launched AI Receptionist, an AI-powered phone agent that leverages generative AI to automatically handle customer inquiries and seamlessly route calls. This solution offers businesses of all sizes an affordable and easy-to-deploy option to enhance call automation, eliminating the complexity and high costs associated with traditional intelligent virtual agents.

RNG is riding on solid demand for its Unified Communications as a Service and contact center software-as-a-service solutions.

This dominant position is further strengthened by the company’s increasing focus on expanding its product portfolio through partnerships with companies such as AT&T, Cox Communications, BT, and Vodafone, all of which are contributing to its growth.

In March 2025, RNG announced a partnership with Cox Business to deliver AI-powered communications solutions, combining Cox’s connectivity with RingCentral’s cloud-based platform for enhanced business communications and customer experiences.

RNG Initiates Strong Q1 Guidance

RingCentral’s robust AI portfolio and expanding partner base are contributing to its growth prospects continuously, driving top-line growth.

For the first quarter of 2025, RingCentral expects revenues of $607-$612 million, indicating year-over-year growth of 4-5%.

The Zacks Consensus Estimate for first-quarter 2025 revenues is currently pegged at $610.74 million, suggesting 4.54% growth over the figure reported in the year-ago quarter. 

The consensus mark for earnings is currently pegged at 96 cents per share, unchanged over the past 30 days. This indicates 10.34% year-over-year growth.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

RNG is a Must Buy Stock Right Now

Despite macroeconomic uncertainties and increasing competition, RNG’s strong AI-driven product adoption, expanding enterprise deal and robust first-quarter guidance make it a compelling investment opportunity.

RNG currently sports a Zacks Rank #1 (Strong Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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