Barclays cuts nCino stock price target to $24, maintains Overweight

On Wednesday, Barclays (LON:BARC) analyst Saket Kalia issued a new price target for nCino Inc. (NASDAQ:NCNO), reducing it to $24 from the previous $44, while keeping an Overweight rating on the shares. Kalia’s reassessment followed nCino’s last price target cut, which he noted was more significant than anticipated. According to InvestingPro data, the stock is currently trading near its 52-week low of $27.29, with analyst targets ranging from $28 to $45. The company appears undervalued based on InvestingPro’s proprietary Fair Value model.

In the wake of the after-hours trading session, Kalia provided three key observations. Firstly, he pointed out that nCino’s Annual Contract Value (ACV) grew organically by 8% in fiscal year 2025, and he anticipates subscription revenue to increase organically by 4% in fiscal year 2026. The cautious forecast is attributed to the U.S. mortgage market, non-recurring revenue benefits, and a shift in guidance philosophy. InvestingPro data shows the company maintaining strong revenue growth of 13.19% over the last twelve months, with a healthy gross profit margin of 60.25%.

Secondly, the Barclays analyst highlighted that ACV should be considered a more accurate real-time indicator of nCino’s business health compared to revenue, which he views as a lagging indicator. Kalia remarked on improved bookings in the fourth quarter and positive customer sentiment, specifically from banks. He believes the 8-9% ACV guidance for fiscal year 2026 is a more reliable metric, and he predicts an acceleration in subscription revenue in fiscal year 2027.

Finally, Kalia recalibrated the price target to $24, based on 26 times the estimated Free Cash Flow (FCF) for fiscal year 2027. He also presented a downside scenario of $17 and an upside scenario of $27. While he does not expect nCino’s stock to rebound as quickly as PCOR’s did, due to slower growth, Kalia suggests that there is market support for quality vertical SaaS companies trading below 5-6 times Enterprise Value/Sales (EV/S). He is optimistic that the company will begin to exceed expectations and raise guidance under the new philosophy. InvestingPro subscribers can access additional insights, including 7 more ProTips and a comprehensive Pro Research Report that provides deep-dive analysis of nCino’s financial health, which currently rates as FAIR according to InvestingPro’s scoring system.

In other recent news, nCino reported its earnings for Q4 2025, revealing mixed results. The company missed earnings per share (EPS) forecasts, reporting $0.12 against an expected $0.19, but slightly exceeded revenue expectations with $141.4 million compared to the forecast of $140.85 million. Full-year revenues grew by 13% year-over-year. Analyst Alexander Sklar from Raymond (NSE:RYMD) James adjusted nCino’s price target from $42.00 to $32.00, maintaining an Outperform rating despite the company’s fiscal year 2026 growth outlook falling short of Wall Street estimates. Sklar highlighted nCino’s ongoing challenges, such as macroeconomic headwinds and investor skepticism, but expressed confidence in the company’s growth potential, especially with new products like Commercial Onboarding and Consumer Lending. CEO Sean Desmond announced strategic shifts towards AI banking solutions, emphasizing the company’s commitment to leveraging AI opportunities. nCino’s fiscal 2026 revenue guidance is set between $574.5 million and $578.5 million, with expectations of subscription revenue growth reacceleration in fiscal 2027.

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