TSX runs higher on rate cut expectations
Investing.com - Goldman Sachs raised its price target on nCino Inc. (NASDAQ:NCNO) to $29.00 from $27.00 while maintaining a Neutral rating following the company’s second-quarter fiscal 2026 results. According to InvestingPro data, nCino currently trades at an EV/EBITDA multiple of 110.5x, suggesting a premium valuation relative to peers.
The cloud banking software provider reported revenue and profitability that exceeded consensus expectations, with subscription outperformance primarily driven by mortgage services, foreign exchange tailwinds, and a modest beat in core commercial business. InvestingPro data shows the company’s revenue grew 13.4% over the last twelve months to $557 million, with analysts expecting continued growth. Get access to 6 more exclusive InvestingPro Tips and comprehensive financial analysis for nCino.
Goldman Sachs estimates that organic, constant currency subscription revenue growth excluding mortgage decelerated from approximately 9% in the first quarter to 6-7% in the second quarter, a metric the firm is monitoring for improvement as bookings are expected to reaccelerate toward year-end.
The research firm noted encouraging demand for nCino’s Banking Advisor product, which has attracted over 80 customers to date, prompting some clients to advance renewal discussions. Additionally, customer adoption of nCino’s new pricing model has reached 21% of annual contract value.
Despite the positive quarterly results, Goldman Sachs expressed caution about nCino’s increasing reliance on new product execution for growth amid an uncertain lending environment, which it believes complicates the outlook for the remainder of fiscal 2026 and into fiscal 2027. While the company maintains a moderate debt level with a debt-to-equity ratio of 0.26, InvestingPro’s analysis indicates the company could be slightly undervalued. Discover detailed valuation metrics and growth projections with InvestingPro’s comprehensive research report, available for over 1,400 US stocks.
In other recent news, Ncino reported its second-quarter earnings for fiscal year 2026, exceeding analyst expectations. The company achieved an earnings per share (EPS) of $0.22, surpassing the forecasted $0.14, resulting in a 57.14% earnings surprise. Additionally, Ncino reported revenues of $148.8 million, which also exceeded the anticipated $143.18 million. These strong financial results reflect a positive performance for the quarter. Despite the favorable earnings report, the stock experienced a minor decline in after-hours trading. Analysts had projected lower figures, making Ncino’s results noteworthy in the current financial landscape. These developments highlight the company’s financial health and performance in the recent quarter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.