Shares of RingCentral (NYSE:RNG) were hitting all-time highs on Monday ahead of the second-quarter financial update that would come shortly after the market close. Folks buying in at the time -- despite the high-water mark for the stock -- were sitting pretty on Tuesday with shares rallying again following the robust earnings news.

The provider of enterprise communications, collaboration, and contact-center solutions had another beat-and-raise financial performance, but that should only come as a surprise to investors who haven't been paying attention. Blasting through its earlier revenue and adjusted earnings guidance has become a quarterly occurrence at RingCentral, and the same can be said about the upward revision of its full-year forecast. 

RingCentral running on a laptop, IP phone, mobile device, and tablet.

Image source: RingCentral.

Making the right call

RingCentral offers a cloud-based platform where companies pay as little as $19.99 a month per employee, making it easy to automatically route inbound calls to IP phones, mobile devices, PCs, and even video conferencing sessions. An enterprise phone system may not seem like a hot niche for growth, but RingCentral is making it happen with its platform that's retaining existing accounts and wooing new ones. 

Revenue clocked in at $215.2 million for the second quarter, a 34% gain. If Walter Payton's jersey number looks familiar here, it's because RingCentral also clocked in with 34% top-line growth in the first quarter -- as well as for all of 2018. Revenue has risen at a 34% clip for five of the past six quarters, and the outlier there was freakishly close at 33.4%. 

Adjusted earnings per share landed on $0.21, just above the $0.19 it rang up a year ago, but well ahead of the $0.16 that analysts were modeling. The beat isn't a surprise. RingCentral has landed at least 13% ahead of Wall Street targets for the past seven quarters. 

The trend is encouraging, with its annualized run rate for RingCentral Office -- its flagship product, accounting for the lion's share of its revenue -- rising 37%. RingCentral is doing a great job wooing new accounts while also increasing its revenue per account.

Guidance for the current quarter calls for revenue growth to slow to a 27% to 28% clip, but this is exactly what it said about the second quarter three months ago. It sees adjusted earnings of $0.18 to $0.20 a share, essentially flat with the prior year. However, it was bracing investors for a double-digit percentage decline in adjusted profitability last time out, and it thankfully went the other way. RingCentral is a serial lowballer of its reality, and investors are the ones making out like bandits with the stock nearly doubling over the past year. 

We also naturally find RingCentral jacking up its full-year outlook again. It's eyeing $874 million to $877 million in revenue for all of 2019, a gain of 30%. This forecast has gone from 26% to 28% growth six months ago to a 28% to 29% rise last time out. Its new adjusted earnings goal of $0.77 to $0.79 a share for 2019 is also higher than earlier outlooks. 

The stock isn't cheap by most valuation standards. Even with its raised guidance on both ends of the income statement, it is trading at nearly 12 times this year's projected revenue and a lofty 160 to 164 times its adjusted earnings target.

However, it's hard to bet against the company as long as it continues to grow its business ahead of market expectations. It's also a safe bet that reality will be kinder than these multiples as it keeps lifting its revenue and profit goals higher. RingCentral isn't a household name for investors, but it won't be long before it starts popping up on more radars. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.