Why RingCentral (RNG) is a Top Growth Stock for the Long-Term

RingCentral (RNG), a leading SaaS provider for cloud communications, is highlighted by Zacks as a top growth stock for the long-term, despite its #3 (Hold) Zacks Rank. The company boasts a strong VGM Score of A and a Growth Style Score of A, underpinned by a forecasted 14.9% year-over-year earnings growth for the current fiscal year. Furthermore, six analysts recently revised fiscal 2025 earnings estimates upwards, contributing to a Zacks Consensus Estimate of $4.25 per share, complemented by an average earnings surprise of +3.4%.

Analysis

RingCentral (RNG) presents a mixed but compelling profile for growth investors, according to Zacks' quantitative analysis. While the stock currently holds a neutral Zacks Rank #3 (Hold), its underlying metrics signal strong potential. The company scores an 'A' for both its composite VGM Score and its specific Growth Style Score, highlighting its appeal across multiple investment factors. This is substantiated by a forecast for 14.9% year-over-year earnings growth in the current fiscal year and a consistent track record of positive earnings surprises, averaging 3.4%. More importantly, forward-looking sentiment appears to be improving, as evidenced by six analysts revising their fiscal 2025 earnings estimates upward in the last 60 days. This collective action has pushed the Zacks Consensus Estimate for FY2025 up to $4.25 per share, suggesting that analyst expectations are trending positively ahead of the stock's official rating.

Key Decisions for Investors

• Investors should look beyond the neutral #3 (Hold) rank and consider the strong underlying 'A' rated Growth and VGM scores as more indicative of the company's fundamental trajectory.
• The positive earnings estimate revisions for fiscal 2025 by multiple analysts represent a key forward-looking indicator that may precede a future ratings upgrade and potential share price appreciation.
• For growth-focused portfolios, RingCentral warrants consideration for a shortlist, given its projected 14.9% earnings growth and a demonstrated history of exceeding analyst expectations.
• It may be prudent to monitor for a potential upgrade in the Zacks Rank, which would serve as a confirmation signal aligning the formal rating with the already positive underlying growth and momentum metrics.