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Strength Seen in RingCentral (RNG): Can Its 5.2% Jump Turn into More Strength?

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RingCentral (RNG - Free Report) shares ended the last trading session 5.2% higher at $52.23. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 23.3% loss over the past four weeks.

The recent upswing can be attributed to the growing adoption of the company’s Unified Communications as a Service (UCaaS) solutions and Ring Central Office owing to the coronavirus-induced work-from-home wave.

The company’s expanding partner base that includes the likes of Microsoft, AT&T, BT, Atos and Alcatel-Lucent is also contributing to RingCentral’s topline growth and profitability reflecting positively in shareholders wealth.

This cloud-based phone system provider for small businesses is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +25%. Revenues are expected to be $479 million, up 26.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For RingCentral, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RNG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

RingCentral is part of the Zacks Internet - Software and Services industry. Globant (GLOB - Free Report) , another stock in the same industry, closed the last trading session 4.1% higher at $177.72. GLOB has returned -7.8% in the past month.

Globant's consensus EPS estimate for the upcoming report has changed +1.4% over the past month to $1.21. Compared to the company's year-ago EPS, this represents a change of +37.5%. Globant currently boasts a Zacks Rank of #4 (Sell).

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