Cautious Optimism for nCino: Hold Rating Amid Growth Potential and Market Penetration Challenges

Morgan Stanley analyst Michael Infante maintained a Hold rating on nCino (NCNO – Research Report) today and set a price target of $27.00.

Michael Infante has given his Hold rating due to a combination of factors that influence the current and future potential of nCino’s stock. One of the primary reasons is the recent reduction in estimates for subscription revenue and adjusted operating income, which makes it easier for the company to exceed expectations in the near term. Additionally, the anticipated pricing uplift and asset growth are expected to accelerate, providing a positive outlook for fiscal year 2027. The company is also poised to benefit from reduced churn and the introduction of new products, such as the AI-powered Banking Advisor.
Despite these positive indicators, Infante remains cautious and prefers to maintain a Hold rating. This is because he seeks more evidence of sustained low-double-digit subscription revenue growth and continued margin outperformance before becoming more optimistic. Furthermore, while nCino is making strides in AI and innovation, Infante wants to observe how well the company penetrates the commercial and consumer markets, which are crucial for achieving long-term growth and a potential re-rating of the stock.

In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $28.00 price target.