What happened

Shares of RingCentral (NYSE:RNG) rose 21.9% in January 2020, according to data from S&P Global Market Intelligence. The provider of cloud-based communications services for businesses both large and small enjoyed a steady stream of bullish analyst notes last month, leading up to the company's fourth-quarter earnings report after the closing bell today.

So what

In support of their price target increases and hold-to-buy upgrades, analysts often cited RingCentral's position of leadership in the cloud telephony market and consistent delivery of solid earnings surprises. The concept of cloud-based communications is gaining traction across the modern business landscape, lighting up a clear path toward more and larger contracts.

Just to pick a voice out of Wall Street's bullish consonance, Wells Fargo analyst Michael Turrin argued that the cloud telephony market stands at the edge of a tipping point that could create a $50 billion annual revenue opportunity.

A golden sculpture of a bull climbing up a staircase.

Image source: Getty Images.

Now what

The tight partnership RingCentral entered into with sector peer Avaya (NYSE:AVYA) in October appears poised to pay dividends very quickly. At the same time, Avaya CEO Jim Chirico recently called the RingCentral deal "game changing" while RingCentral CFO Mitesh Dhruv said that it would combine Avaya's massive market reach with RingCentral's market-leading Universal-Communications-as-a-Service products.

There's a lot to unpack and a lot to like about RingCentral's growth prospects. The fourth-quarter report tonight will put more meat on those bones, either confirming or refuting Wall Street's optimistic projections.

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.