Balanced Outlook on nCino: Strong Performance Amidst Growth Uncertainty

Koji Ikeda, an analyst from Bank of America Securities, reiterated the Hold rating on nCino. The associated price target is $38.00.

Koji Ikeda has given his Hold rating due to a combination of factors that reflect both positive developments and areas of uncertainty for nCino. The company reported strong quarterly results, surpassing expectations and raising its future guidance, which indicates solid execution and an improving demand environment. However, despite these positive signs, Ikeda maintains a cautious stance, reiterating a Neutral rating until there is more clarity on nCino’s ability to achieve a robust double-digit revenue growth profile by FY27.
Another factor influencing the Hold rating is the promising trend in the adoption of nCino’s AI solutions, with over 110 customers purchasing Banking Advisor Intelligence Units. This suggests potential for increased subscription revenue as AI capabilities expand. Nevertheless, while the company is on track to meet its Rule-of-40 target, the uncertainty surrounding the exact subscription revenue growth profile at that point remains a concern. Therefore, Ikeda’s rating reflects a balanced view, acknowledging both the company’s technological leadership and the need for further evidence of sustained growth.

Ikeda covers the Technology sector, focusing on stocks such as Autodesk, JFrog, and Zeta Global Holdings Corp. According to TipRanks, Ikeda has an average return of 11.6% and a 57.67% success rate on recommended stocks.