By Sam Boughedda
RingCentral, Inc. (NYSE:RNG) was downgraded to Neutral from Buy, with its price target removed by BTIG on Tuesday.
In a note to clients, analysts there said checks are slowing amid a changing competitive landscape for the company.
"We are downgrading RNG to Neutral given mounting pressure in the market from competition and potential macro headwinds, which is based on our recent round of comprehensive fieldwork in the space," wrote the analysts. "Overall, we are hearing RNG's standing in the channel is being challenged by other vendors that are pricing their offerings aggressively and providing lucrative opportunities to recruit channel partners away from the RNG ecosystem."
They went on to state that this round of checks has been "by far the least positive" around RingCentral and seems like "a sea change" from earlier in the year when partners were still very aligned with RNG as the best partner to work with on many levels.
"We have admittedly been fighting the downward pressure on the shares for some time, but held conviction previously because results continued to exceed expectations, and we thought investor sentiment would eventually swing back. However, our checks now indicate a meaningful slowdown in channel performance and we no longer view the risk-reward scenario as attractive for now," the analysts added.