RingCentral, Inc. (NYSE:RNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. RingCentral, Inc., together with its subsidiaries, provides cloud communications, video meetings, collaboration, and contact center software-as-a-service solutions worldwide. The US$3.0b market-cap company's loss lessened since it announced a US$165m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$139m, as it approaches breakeven. Many investors are wondering about the rate at which RingCentral will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 24 of the American Software analysts is that RingCentral is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$90m in 2026. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 70% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of RingCentral's upcoming projects, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. RingCentral currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on RingCentral, so if you are interested in understanding the company at a deeper level, take a look at RingCentral's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

1. Valuation: What is RingCentral worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether RingCentral is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on RingCentral's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com