More Bullish Analyst Attention for RingCentral Stock

Short interest shot higher in the last reporting period on RNG

Oct 28, 2019 at 10:19 AM
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RingCentral Inc (NYSE:RNG) shares recently bounced from the $150 area, near the site of their huge bull gap earlier this month, and today they're trading up 0.5% at $161.41, thanks to a bullish note out of brokerage firm Jefferies. The analyst in coverage says they see a path where the company's annual revenue can top $2 billion, keeping their "buy" recommendation in place and adding the stock to their "Franchise Picks" list and lifting the price target to $210 from $152.

The price target is a 30% premium to where RNG shares are trading now, and well into record-high territory for the stock, which peaked at $177.99 two weeks ago. Overall, the software concern is up 95.5% on a year-to-date basis.

Despite this, short interest has started to pick up again since we covered RNG at the start of the month. In fact, the last reporting period saw short interest jumped 27.1%, and now there are 5.44 million shares sold short in total, the equivalent of five times the average daily trading volume.

And near-term options traders also remain skeptical it would seem, since the Schaeffer's put/call open interest ratio (SOIR) comes in at 1.31. This reading ranks in the 73rd annual percentile, too, so it's rare to see traders targeting contracts that expire within three months sitting so put-skewed. Much of this is at far out-of-the-money strikes, however, with peak open interest sitting at the November 115 put, and the November 120 isn't far behind.

But most analysts have remained on the bullish side like Jefferies. By the numbers, there are 15 firms in coverage on RNG, and 14 of them recommend buying the stock. Looking ahead, after market close and one week from today, RingCentral is slated to report third-quarter earnings.

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