Stephens raises nCino stock price target to $28 from $24

On Wednesday, Stephens analyst Charles Nabhan updated the firm’s outlook on nCino Inc. (NASDAQ:NCNO), increasing the price target to $28 from $24 while maintaining an Equal Weight rating. The adjustment followed the company’s Investor Day/client conference, nSight ’25, which took place earlier in the week. The event was attended by nCino’s financial institution customers, partners, and investors. The company, currently valued at nearly $3 billion, has seen its stock trade at $25.81, up from its 52-week low of $18.75 but well below its high of $43.20.

Nabhan noted that the company pre-announced first-quarter results that exceeded expectations. The positive sentiment was further bolstered by nCino’s focus on strategic growth areas. The company emphasized its pricing strategies, deeper penetration into the credit union sector, and enhancements in delivery and research and development processes as key drivers for growth and margin expansion. With a robust gross profit margin of 60% and revenue growth of 13.45%, InvestingPro analysis suggests the company shows promise despite current challenges.

Despite the optimistic outlook on nCino’s initiatives and control over its growth levers, the analyst described the company as a "show me" story. This characterization suggests a cautious approach due to the mixed demand environment and the early stages of the company’s growth initiatives. According to InvestingPro, which offers comprehensive analysis through its Pro Research Reports available for over 1,400 US stocks, the company currently trades at a high EV/EBITDA multiple of 100.5x, reflecting market expectations for future growth.

The reiterated long-term goals and the "rule of 40" target for the end of fiscal year 2027 were cited as consistent with previous statements. The "rule of 40" is a benchmark in the software industry that suggests a company’s combined growth rate and profit margin should exceed 40% to be considered successful.

In conclusion, while acknowledging the potential for growth and margin improvement, Stephens maintains a watchful stance on nCino’s stock, reflected in the Equal Weight rating. The new price target of $28 represents Stephens’ revised valuation of the company’s prospects.

In other recent news, nCino Inc. announced preliminary first-quarter results that exceeded its earlier financial guidance, with Total (EPA:TTEF) Revenues, Subscription Revenues, and non-GAAP Operating Income surpassing expectations. The company is set to release detailed fiscal 2026 results on May 28, 2025. Analysts have responded to these developments with varied assessments. Piper Sandler maintained a Neutral rating with a $25 target, noting the company’s potential growth opportunities in cross-selling and AI innovation but expressing caution until further execution is demonstrated. KeyBanc Capital Markets also kept a Sector Weight rating, highlighting the company’s strategic shift towards AI but remaining cautious pending further evidence of successful execution.

Meanwhile, Keefe, Bruyette & Woods reiterated an Outperform rating with a $28 price target, citing nCino’s growth strategies, including European expansion and entry into the credit union market. The firm’s confidence is bolstered by nCino’s focus on operational efficiency and sustainable growth. nCino’s Investor Day revealed a strategic emphasis on artificial intelligence integration, which analysts see as a move towards enhancing market relevance. As the company navigates these strategic initiatives, investors await the upcoming earnings call for more insights into nCino’s financial trajectory.

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