BofA update shows where active managers are putting money
Investing.com - UBS has raised its price target on nCino Inc. (NASDAQ:NCNO) to $39.00 from $34.00 while maintaining a Buy rating following the company’s strong fiscal second-quarter 2026 results. The new target aligns with the broader analyst consensus, with targets ranging from $29 to $41. According to InvestingPro data, the stock appears slightly overvalued at current levels, with 9 analysts recently revising their earnings expectations upward.
The cloud banking software provider reported total revenue and non-GAAP operating income approximately 4% and 24% above the high end of guidance, respectively. The performance was driven by approximately 9% FXN organic subscription revenue growth, exceeding UBS estimates of around 7%. InvestingPro data shows the company maintaining strong revenue growth of 13.2% over the last twelve months, with a healthy gross profit margin of 60.2%.
nCino’s quarterly outperformance stemmed from several factors, including an acceleration in its mortgage business to approximately 22% year-over-year growth compared to 7% in the first quarter. The company also benefited from a roughly 150 basis points foreign exchange tailwind, contrasting with its previous guidance of a 100 basis points headwind. This momentum has contributed to a significant 17.6% return over the past week, as tracked by InvestingPro, which offers additional insights through its comprehensive Pro Research Report.
Following these results, nCino management increased its fiscal year 2026 subscription revenue growth guidance to approximately 9%, up from the previous 8-9% range. The company also raised its non-GAAP operating income margin guidance by roughly 100 basis points at the midpoint to approximately 20.7%.
UBS noted that nCino’s continued outperformance in operating income margins, which increased approximately 560 basis points year-over-year in the second quarter, along with progress in growth initiatives, makes the company’s goal of achieving Rule of 40 by fiscal fourth-quarter 2027 appear more achievable.
In other recent news, nCino Inc. has reported second-quarter results that have exceeded expectations, leading to several stock price target increases from various analyst firms. Notably, Needham raised its price target to $38, citing strong performance in subscription revenue and operating leverage, along with an optimistic third-quarter guidance and an increased fiscal year 2026 outlook. Piper Sandler also increased its target to $34, highlighting a $5.3 million beat in subscription revenue, which marked the largest since 2022. Keefe, Bruyette & Woods set a new target of $34.50, acknowledging nCino’s subscription revenue surpassing guidance by 3.4% and beating consensus estimates by 4.1%. Raymond James adjusted its target to $36, noting the company’s largest top-line beat in several years and a positive outlook on the macroeconomic environment. Truist Securities raised its target to $32, emphasizing nCino’s progress on growth initiatives and better-than-expected profits. These developments reflect a consensus among analysts regarding nCino’s strong quarterly performance and future potential.
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