nCino (NCNO) AI Stock Analysis

• Market Cap: $3.30B
• Dividend Yield: N/A
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: 13.19%
• EPS Growth: 72.80%
• Country: US
• Employees: 1,653
• Sector: Technology
• Sector Strength: 51
• Industry: Software - Application
• EPS (TTM): -0.16
• Shares Outstanding: 115,793,930
• 10 Day Avg. Volume: 1,196,450
• 30 Day Avg. Volume: 1,268,224
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.31
• Price to Cash Flow (P/CF): 142.80
• P/FCF Ratio: 166.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $42.14
• Price Target Upside: 45.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

nCino's overall score reflects strong financial performance and promising corporate developments, tempered by valuation concerns and mixed technical indicators. While the company demonstrates growth potential through strategic leadership changes and international expansion, achieving consistent profitability remains crucial to improving its financial standing and valuation appeal.

Positive Factors

Acquisition Strategy

The acquisition of Sandbox Banking is seen as a strategic move to enhance nCino's offerings, particularly in consumer end markets, which have a larger market opportunity.

Financial Guidance

The FY25 revenue guidance was reiterated, showing confidence in the company's financial outlook.

Strategic Influence

The involvement of HMI Capital, which has taken a Board seat, signals potential for further strategic influence and opportunities for the company.

Negative Factors

Investor Confidence

Insight Partners has been selling a large number of shares, which could indicate a lack of confidence or a shift in investment strategy.

Management Concerns

The frequency of management turnover at the company is concerning and there is wariness about any potential resetting of medium-term expectations.

Share Performance

The stock has decreased by 3%, contrasting with a 3% increase for the Russell 3000, indicating underperformance.

nCino Business Overview & Revenue Model

Company Description

nCino, Inc., a software-as-a-service company, provides cloud-based software applications to financial institutions in the United States and internationally. Its nCino Bank Operating System, a tenant cloud platform, which digitizes, automates, and streamlines complex processes and workflow; and utilizes data analytics and artificial intelligence and machine learning (AI/ML) to enable banks and credit unions to onboard new clients, make loans and manage the entire loan life cycle, open deposit and other accounts, and manage regulatory compliance. The company's nCino IQ, an application suite that utilizes data analytics and AI/ML to provide its customers with automation and insights into their operations, such as tools for analyzing, measuring, and managing credit risk, as well as to enhance their ability to comply with regulatory requirements. It also offers SimpleNexus, a suite of products that enables loan officers, borrowers, real estate agents, settlement agents, and others to engage in the homeownership process from internet-enabled device. The company serves financial institution customers, including global financial institutions, enterprise banks, regional banks, community banks, credit unions, new market entrants, and independent mortgage banks through sales team comprising business development representatives, account executives, field sales engineers, and customer success managers. nCino, Inc. was founded in 2011 and is headquartered in Wilmington, North Carolina.

How the Company Makes Money

nCino generates revenue primarily through subscription fees for its cloud-based software solutions, which are typically sold under multi-year contracts to financial institutions. The company charges its clients based on the number of users or the volume of transactions processed through its platform. Additionally, nCino offers professional services, including implementation, training, and consulting, which contribute to its revenue. Strategic partnerships with core banking system providers and other fintech companies also play a role in expanding its market reach and enhancing its platform capabilities.

nCino Financial Statement Overview

Summary

nCino shows promising growth in revenues and effective cash management, despite ongoing profitability challenges. The company maintains a strong balance sheet with low leverage and high equity, positioning it well for future opportunities. However, achieving consistent profitability remains a critical focus to enhance financial performance.

Income Statement

nCino demonstrates strong revenue growth with a TTM revenue of $522.98 million, up from $476.54 million in the previous year. While the gross profit margin remains healthy at 58.86%, the company struggles with profitability, as evidenced by a negative net profit margin of -3.46% and an EBIT margin of -1.93%. Despite a positive EBITDA margin of 4.21%, ongoing net losses highlight challenges in achieving operational efficiency.

Balance Sheet

The company maintains a robust financial position with a strong equity ratio of 71.77% and low leverage, indicated by a debt-to-equity ratio of 0.015. However, the return on equity remains negative at -1.66%, reflecting ongoing net losses. The substantial stockholders' equity and low debt levels suggest financial stability and potential for future growth.

Cash Flow

nCino's cash flow performance is solid, with a significant increase in free cash flow to $71.47 million, representing a growth rate of 33.83% from the prior year. The operating cash flow to net income ratio of 4.05 indicates efficient cash generation relative to net losses. The company's ability to maintain positive free cash flow amidst negative net income demonstrates effective cash management.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
522.98M	476.54M	273.87M	204.29M	204.29M	138.18M
	Gross Profit
307.85M	285.07M	162.45M	116.16M	116.16M	74.11M
	EBIT
-10.09M	-33.48M	-71.36M	-42.61M	-42.61M	-28.17M
	EBITDA
22.01M	7.46M	-56.47M	-59.90M	-33.12M	-22.54M
	Net Income Common Stockholders
-18.11M	-42.35M	-50.12M	-41.27M	-40.54M	-27.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
91.18M	112.08M	88.01M	371.43M	371.43M	91.18M
	Total Assets
250.15M	1.34B	1.30B	563.40M	563.40M	250.15M
	Total Debt
0.00	74.23M	48.84M	16.26M	16.26M	0.00
	Net Debt
-91.18M	-37.86M	-39.17M	-355.16M	-355.16M	-91.18M
	Total Liabilities
78.52M	287.83M	230.51M	134.43M	134.43M	78.52M
	Stockholders Equity
167.27M	1.05B	1.07B	425.18M	425.18M	167.27M
Cash Flow		Free Cash Flow
71.47M	53.41M	-24.69M	4.88M	4.88M	-14.76M
	Operating Cash Flow
73.37M	57.28M	-19.23M	9.22M	9.22M	-9.00M
	Investing Cash Flow
-92.16M	-6.33M	-278.49M	-4.34M	-4.34M	-58.03M
	Financing Cash Flow
170.37M	-21.11M	15.92M	274.12M	274.12M	84.09M

nCino Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NCNO, the sentiment is Negative. The current price of 28.98 is below the 20-day moving average (MA) of 29.49, below the 50-day MA of 31.69, and below the 200-day MA of 33.45, indicating a bearish trend. The MACD of -1.04 indicates Negative momentum. The RSI at 41.78 is Neutral, neither overbought nor oversold. The STOCH value of 59.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NCNO.

nCino Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSNC	78 Outperform	$20.40B	27.48	11.81%	1.19%	6.89%	26.17%
EVTC	78 Outperform	$2.39B	21.52	21.11%	0.54%	21.70%	43.10%
MKTX	73 Outperform	$7.98B	29.80	20.45%	1.37%	9.06%	6.10%
NCNO	67 Neutral	$3.30B	―	-1.71%	―	13.19%	72.80%
BL	66 Neutral	$3.16B	22.59	45.56%	―	10.74%	200.08%
FICO	65 Neutral	$46.34B	87.09	-47.82%	―	14.49%	21.85%
Sector *	58 Neutral	$22.11B	10.47	-17.86%	2.40%	4.75%	-24.81%

nCino Corporate Events

nCino Expands Board with New Strategic Appointment

On February 10, 2025, nCino announced a cooperation agreement with HMI Capital, resulting in the appointment of Justin Nyweide to its Board of Directors and the Audit Committee. This strategic move, effective immediately, expands nCino’s board to ten members and aligns with the company’s growth objectives by leveraging Nyweide’s extensive investment expertise. The agreement with HMI Capital, a major shareholder, includes provisions for voting and standstill arrangements, potentially impacting nCino’s governance and strategic direction.

nCino Announces New CEO and Strategic Leadership Change

On February 1, 2025, Sean Desmond was appointed as the new CEO of nCino, Inc., succeeding Pierre Naudé, who transitioned to the role of Executive Chairman. This leadership change is expected to drive nCino’s next phase of growth and innovation, leveraging Desmond’s expertise in scaling large organizations and his forward-thinking approach to product innovation. Desmond, who has been with nCino since 2013, will focus on delivering data-driven experiences through the company’s intelligent platform, aiming for global market growth. The company reaffirmed its fiscal guidance for 2025, indicating stability and continued strategic direction under the new leadership.

nCino Revises Executive Agreements for Market Alignment

nCino, Inc. has updated the employment agreements for its executive leadership team, including CEO Pierre Naudé, to reflect current compensation levels and better align with market practices. The new agreements detail severance packages and benefits in the event of termination, aiming to secure the executives’ positions and potentially improve the company’s stability and attractiveness to stakeholders.