What happened

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.

So what

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.

A person pointing to an upward-sloping digital chart.

RingCentral delivered solid sales growth in the second quarter. Image source: Getty Images.

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.

Now what

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.