Shares of RingCentral (NYSE:RNG) popped more than 11% on July 30, after the cloud-based communications software company announced strong second-quarter results and received an analyst upgrade.
RingCentral's revenue surged 34% year over year to $215 million. The company is successfully wooing new subscribers for its voice, video, messaging, and contact center solutions.
Meanwhile, the company's non-GAAP (adjusted) earnings per share rose 11% to $0.21. That was significantly above Wall Street's expectations for adjusted EPS of $0.16.
Based on these results and current trends, RingCentral boosted its full-year financial outlook. The company now expects revenue to increase 30% year over year to between $874 million and $877 million, up from prior guidance of $862 million to $866 million. Management also raised its adjusted earnings target to a range of $0.77 to $0.79, up from $0.71 to $0.75.
Following its Q2 results, RingCentral received some positive analyst commentary. Raymond James analyst Brian Peterson reiterated his strong buy rating on the stock and increased his price target from $140 to $175.
Peterson believes that the market does not yet appreciate RingCentral's long-term growth potential, particularly in the enterprise communications market. Judging by the stock's recent gains, investors appear to agree.