It's not fair to call RingCentral (RNG 0.51%) a pandemic play, and that makes the recent market rotation out of the next-gen telco platform operator all the more frustrating. RingCentral stock has surrendered nearly 30% of its value since hitting an all-time high two months ago, and at least one Wall Street pro likes the opportunity to buy.

BofA analyst Daniel Bartus is reinstating coverage of RingCentral with a buy rating. His new $450 price target -- a buck above February's all-time high of $449 -- suggests 41% in upside from here. Bartus concedes that the COVID-19 crisis has bolstered the prospects for RingCentral as well as other unified communications-as-a-service (UCaaS) vendors, but he doesn't see this as a short-lived tailwind. He's right. 

A person working on a cluttered desk across various devices.

Image source: Getty Images.

Making the right connection

RingCentral joined Zoom Video Communications (ZM 0.15%) as one of the early market winners defying the initial malaise of last year's pandemic sell-off. If folks were going to be working from home, RingCentral made sense for investors looking for an off-the-radar play in the movement that Zoom was championing. 

Now is probably as good a time as any to take a closer look at what RingCentral does. Companies pay RingCentral as little as $19.99 a month per user for the cloud-based platform that automatically routes inbound calls to wherever the user may be. Whether it's an IP phone, mobile device, PC, or videoconferencing room, RingCentral makes sure that an incoming call doesn't just die at an extension's voice mailbox.

Connectivity matters in the new normal, but hasn't that always been the case? RingCentral's revenue soared 31% last year, but that's in line with its historical growth spurts. RingCentral has grown its top line by at least 28% every single year over the past decade. In fact, the 31% increase in 2020 is the second-worst showing over the past 10 years. 

The pandemic made RingCentral's product more essential than ever, but as folks start returning to the office it doesn't mean that companies can just cut the platform loose and place the burden of connections on the receptionist or a company's archaic PBX telecommunications system. Many companies are going hybrid, straddling office time with working from home as a means to save money and increase productivity. 

Zoom is the definitive growth stock of 2020, and it's not going away anytime soon. However, it's easy to see how usage will dip with virtual classes going back to the classroom, some business meetings returning to the conference rooms, and your parents not settling for Zoom gatherings anymore. It's a different story with RingCentral, where we are highly likely to see a slowdown in retention and growth on the platform.

RingCentral's guidance in mid-February for the current quarter and all of 2021 was better than expected on all fronts. It is eyeing deceleration on the top line, but ride this one out with me. RingCentral sees revenue growing 26% to 27% for the quarter that ended in March and 25% to 26% for the entire year. 

If this sounds familiar it's because RingCentral was also forecasting 25% to 26% in revenue growth a year earlier for all of 2020. RingCentral routinely puts out conservative guidance, and analysts fall for it every time. RingCentral has now topped Wall Street's profit targets for 13 consecutive quarters

Many investors proficient in SaaS stocks and telecom stocks don't know a lot about RingCentral, and that's a shame. We're talking about annual revenue growth of 28% or better for a decade, and a product that was necessary for the new normal but just as essential for the next new normal. The stock's sharp correction over the past two months is creating a buying opportunity. RingCentral is calling, and it's making it easier for you to answer right now.