nCino’s Path to Recovery: Hold Rating Amid Internal and External Challenges

In a report released today, Adam Hotchkiss from Goldman Sachs downgraded nCino (NCNO – Research Report) to a Hold, with a price target of $24.00.

Adam Hotchkiss has given his Hold rating due to a combination of factors impacting nCino’s performance. The company is experiencing a slowdown in its core commercial business, which is attributed to both internal and external challenges. Internally, there have been issues with the integration of DocFox and sales execution, while externally, there is a broader slowdown in commercial and mortgage lending, particularly in the US.
Despite the potential for growth through new products and pricing models, as well as a possible recovery in the lending environment, nCino is currently seen as a “show me” story. This means that the company will need to demonstrate consistent execution over multiple quarters to regain investor confidence and achieve shareholder returns. As a result, the path to recovery appears elongated, justifying the Hold rating.

In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $28.00 price target.