was tumbling Thursday after another senior executive stepped down at the cloud-based communications company, prompting Mizuho analysts to slash their price target amid execution concerns.
The departure of RingCentral (ticker: RNG) President and Chief Operating Officer Anand Eswaran was announced in the company’s earnings call on Wednesday. The news comes roughly one month after Chief Financial Officer Mitesh Dhruv announced his intention to step down by year-end. Chief Strategy Officer Praful Shah retired in early September.
The stock fell 12.2% to $188.28.
Surprised by the president’s exit, Mizuho analysts lowered their price target on shares of RingCentral to $300 from $400. They maintained their Buy rating.
“Undoubtedly today’s announcement could trigger near-term disruption and will (in our view) fuel the ongoing bearish narrative around RingCentral’s growth fundamentals and keep shares range-bound until stellar execution manifests in coming quarters,” said Mizuho analyst Siti Panigrahi, who added the firm “no longer sees RingCentral as our top pick.”
Mizuho added in its note, however, that the valuation on shares of RingCentral remains “attractive.”
Analysts at William Blair, who have an Outperform rating on the stock, continue to believe in the company despite the executive changes.
“While multiple executive leadership transitions will need to be carefullymanaged to avoid disruption in execution, we believe that the broader team at RingCentral has built a strong foundation, which we expect will continue to drive durable growth in the business going forward,” said William Blair analyst Bhavan Suri.
RingCentral, meanwhile, reiterated that it expects full-year 2021 revenue of $1.58 billion to $1.581 billion, representing annual growth of 33% to 34%.
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