RingCentral shares rose more than 6% Tuesday in premarket trades after it reported Q1 results that were better than anticipated and exceeded expectations regarding FY EPS and Q2.

RNG Q1 adjustedEPS was 39c. This is an increase of 27c from the previous year and higher than the consensus estimate of 34c. The revenue came to $467.7million, which was 33% higher YoY than the analyst’s expectations of $458.3 millions. Revenue from software subscriptions was $439.9M, an increase 35% YoY.

RingCentral anticipates that revenue will range from $475.5million to $479.5million in Q2. Analysts were expecting $477.2million. Analyst consensus was for a 40c-41c adjusted EPS. The firm exceeds the analysts’ expectations of 38c per share. The second quarter’s software subscription revenues are expected to be between $449 and $452 millions.

RNG anticipates an adjusted EPS range between $1.83 and $1.87 for the full year, which is higher than the $1.69-$1.72 forecasted previously, as well as the consensus projection at $1.71 per share.

Provider of cloud-based collaboration solutions and communication services expects FY subscription revenue to be in the $1.88 billion to 1.90 billion range. Analyst expectations for $2.01 trillion are lower than the $1.99 billion to $2.02 billion total revenue.

Vlad Shmunis, founder and chairman of RingCentral said, “We had an extremely strong start to this year. This was driven by continued success at large enterprise clients and ramping contributions by our partners.”

Timothy Horan, Oppenheimer Analyst, elevated RingCentral’s performance to Outperform. He set a target price of $100.00.

Analyst Timothy Horan stated in a note that RingCentral should benefit from our optimistic outlook regarding the cloud communications industry, and predicted (in a fifty-page whitepaper) that it will grow to $100B by six years.

Siti Panigrahi, Mizuho analyst, lowered the price target by $150.00 to reflect SaaS multiple compression. This is down from $220.00 However, the analyst remains positive after “strong results.”

“We expect RingCentral to deliver durable revenue growth (30%+) driven by its aggressive partnership strategy and potential for share gain within a large and growing TAM… RNG shares are currently trading an attractive valuation at 4x EV/NTM Revenue for a company that we believe can grow subscription revenue 30%+ Y/Y, and we thus recommend buying RNG shares,” Panigrahi said in a client note.

By Senad Karaahmetovic