RNG
RingCentral, Inc.
$43.54
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 28.8% below fair value
You pay
$43.54
Bear
$44.54
Fair
$61.18
Bull
$76.91
Bear
$44.54
+2.3%
5% stage 1 growth, 11% discount
Fair
$61.18
+40.5%
9% stage 1 growth, 11% discount
Bull
$76.91
+76.7%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
13.4x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $42.13 from 42 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $61.18 per share.
Warnings
Stock-based employee pay equals 621% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $42.13 (from 42 analysts). Our estimate is 65% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions