nCino (NCNO, Financial) has experienced notable stock movement recently, driven by its fiscal 2025 Q2 results. Despite slightly better-than-expected trailing numbers, concerns over forward guidance led to a significant 11.84% drop in stock price over the past week.
nCino reported total revenue of $132.4 million, with subscription revenue reaching $113.9 million, both increasing by mid-teen percentages year over year. The company's non-GAAP net loss was just under $16 million ($0.14 per share), a slight improvement over the $11 million loss reported in the same period last year.
For the upcoming quarter, nCino's guidance anticipates revenue between $136 million and $138 million, with adjusted net income projected at $0.15 to $0.16 per share. These figures fell short of analyst expectations, which were $138.6 million in revenue and $0.16 per share in adjusted profitability.
Analyst Mayank Tandon from Needham has reduced his price target for nCino by $2 per share to $40, citing a quarterly decline in the company's remaining performance obligation by nearly 3% as a significant factor behind the sell-off.
Analyzing nCino's stock data, we see that the current stock price is $30.195, reflecting a 1.53% increase in the latest trading session. The market cap stands at approximately $3.49 billion. nCino has a price-to-book ratio of 3.19, close to its 1-year low, which might indicate undervaluation compared to historical norms.
Despite some concerns, nCino shows strong financial health with an Altman Z-Score of 6.2, suggesting robust financial stability. Additionally, the company's Beneish M-Score of -2.86 indicates it is unlikely to be a manipulator. nCino's operating margin is expanding, a positive sign for future profitability.
From a valuation perspective, nCino is currently labeled as "Modestly Undervalued" based on its GF Value of $37.69. Given the current price, this suggests potential upside for investors.
However, there are cautionary signs. nCino has witnessed extensive insider selling with 57 transactions over the past three months, raising questions about insider confidence. Furthermore, the company's revenue growth has slowed, which could point to longer-term challenges in maintaining its growth trajectory.
In summary, while nCino (NCNO, Financial) is facing some near-term challenges reflected in its recent stock price movement, its financial health and current valuation position it as a potentially attractive opportunity for investors willing to navigate the short-term volatility.
