Even though China-based software company Cloopen Group’s (RAAS) top line grew substantially in the second quarter, its shares have retreated significantly in price from their $59 all-time high, which they hit on February 9. So, let’s evaluate if it is wise to bet on the stock at its current price level considering the benefits from the company’s acquisition of EliteCRM. Read on.China-based multi-capability cloud-based communications solutions provider Cloopen Group Holding Limited’s (RAAS) offerings include a communications platform as a service (CPaaS) and cloud-based contact centers (cloud-based CC). The stock hit an all-time $59 price high on its stock market debut on February 9, 2021. But the shares have plunged 88.4% in price since. Furthermore, RAAS’ stock has lost 71.9% over the past six months and 41.6% over the past three months to close yesterday’s trading session at $5.56.
RAAS’ acquisition of EliteCRM earlier this year helped it improve its product pipeline and attract more large-enterprise customers. The company also announced that it expects its revenues to be between RMB275 million ($42.54 million) and RMB278 million ($43 million) in the third quarter, representing an increase of 43.8% - 45.3% year-over-year.
However, this outlook is subject to uncertainty and substantial change, based on factors such as the impact of the COVID-19 outbreak and the new regulations on K-12 after-school tutoring in China. Also, RAAS’ losses widened in the second quarter. So, its near-term prospects look bleak.