Mizuho downgrades RingCentral on subscription growth concerns, shares down 7%

Investing.com — Mizuho Securities has downgraded Ringcentral Inc (NYSE:RNG) to “neutral,” citing uncertainties in its subscription revenue growth trajectory for 2025. The firm maintained its price target at $42. Shares of RingCentral were down more than 7%.

The downgrade follows RingCentral’s strategic shift to prioritize its internally developed contact center solution, RingCX, over its longstanding partnership with NICE.

“With the future of the NICE partnership now in question, we see risk to consensus subscription revenue growth in 2025 and lack of catalysts for revenue re-acceleration,” analysts wrote.

Mizuho (NYSE:MFG) analysts noted that the partnership had been a significant driver of growth for RingCentral’s contact-center-as-a-service (CCaaS) revenue. With its future now uncertain, the analysts expressed concerns over a lack of clear catalysts for revenue acceleration next year.

RingCentral is one of several software companies facing pressures from a cautious macroeconomic environment. While the broader software sector shows resilience, Mizuho highlighted risks such as elongating sales cycles and heightened competition.

Brokerage also downgraded 8×8 Inc (NASDAQ:EGHT) to “underperform,” trims price target to $2.50 from $2.75. Shares of the company were down about 16% at $2.6