19 de January de 2018

This Amazon Partner And Cisco Rival May Ring In New Breakout

As the global leader in cloud-based communication and collaboration solutions for businesses and other enterprises, RingCentral (RNG) has no shortage of rivals, including Vonage (VG), Cisco Systems (CSCO), Microsoft (MSFT) and IBD 50 member Atlassian (TEAM).

X But it also has a new partner: Amazon.com (AMZN). In November, the 2013 IPO announced it had collaborated with Amazon Web Services to develop RingCentral Meetings for Alexa for Business.

Using Alexa, Amazon’s voice-controlled digital assistant technology, the new RingCentral Meetings offerings let users join meetings, send text messages, listen to voice mails and make calls using voice commands.

Last summer, RingCentral was named the No. 1 cloud communications solution provider by Synergy Research, which said RingCentral’s roster of more than 350,000 client organizations makes it the worldwide market-share leader in both revenue and subscriber seats for Unified Communications as a Service (UCaaS).

133% Earnings Growth

RingCentral has generated average EPS gains of 133% over the last three quarters, and analysts expect the California-based company to deliver a 100% increase when it reports Q4 numbers in mid-February.

The company would have made the latest list of stocks expecting 50%-plus earnings growth in Q4, but its 94 Composite Rating was just below the 95 minimum benchmark.

Sales growth has also been impressive, with RingCentral increasing revenue at an annual pace of 31% over the last three years.

On the downside, the company has a lackluster return on equity of 5.4% and a lowly pretax profit margin of 1.8%.

Still, institutional investors continue to show interest in the stock, as indicated by a 1.3 up/down volume ratio, B- Accumulation/Distribution Rating and six quarters of rising fund ownership.

New Year, New Breakout?

Since breaking out of a long and deep cup with handle last February, RingCentral has nearly doubled in price while consistently finding support along its 10-week line.

The stock is currently working on a flat base with a 50.05 buy point. The pattern is part of a longer, second-stage base-on-base formation.

One blemish is the somewhat lagging relative strength line. See if RingCentral’s RS line can pick up steam and hit new high ground at the time of any breakout attempt.

On Wednesday, the stock was up 1% to close at 49.30.

After getting off to a stellar start, the general market may be running into selling pressure, which could create headwinds for stocks like RingCentral and Amazon that are in or near potential buy zones. After a morning sell-off Wednesday, the Nasdaq, SP 500 and Dow managed to rebound and recoup the bulk of their earlier losses.

Amazon is in buy range, currently trading 3% above the 1,213.41 buy point it initially cleared on Jan. 4.

RingCentral rival Atlassian is working on a second-stage cup with a 53.55 buy point, while Microsoft remains within buy range following a breakout on Dec. 15. Cisco is trading about 17% above the buy point it cleared in October.

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Article source: https://www.investors.com/research/ibd-stock-analysis/microsoft-cisco-rival-ringcentral-near-breakout/

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