However, one analyst says RingCentral Inc RNG 2.43% is also getting a COVID-19 boost, and is anticipating an imminent product launch that will replace Zoom within the RingCentral customer base.
Rosenblatt Securities analyst Ryan Koontz reiterated his Buy rating and $245 price target for RingCentral.
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Koontz believes RingCentral will launch its own video product called RCMeeting within the next week.
“We expect that in the very near term RCMeeting will not only begin to be sold in RingCentral Office (RCO) bundles across most US segments, but it will also begin to replace the installed base of ZM at RNG customers,” Koontz wrote in a note.
He said RCMeeting will also eliminate the limit on simultaneous video conference participants that was part of the previous Zoom license.
Koontz said his research suggests RingCentral’s business has been booming across all segments since the U.S. COVID-19 outbreak began. He said this strong demand will likely continue throughout the second quarter as well.
While the outbreak may be temporary in nature, Koontz said RingCentral will likely benefit from customers being forced to work from home realizing the value and efficiency of cloud-hosted communication and collaboration.
For Zoom Video investors, Koontz said the loss of RingCentral will likely not have a material impact on overall revenue.