Truist Securities raises nCino stock price target to $32 on growth initiatives

Investing.com - Truist Securities raised its price target on nCino Inc. (NASDAQ:NCNO) to $32.00 from $27.00 on Wednesday, while maintaining a Hold rating on the banking software provider. According to InvestingPro data, analyst targets for nCino range from $27 to $41, with the stock currently trading near Fair Value levels.

The price target increase follows nCino’s second-quarter results, which showed subscription revenue upside and profit that exceeded expectations. Truist noted the company is making progress on several growth reacceleration initiatives that are beginning to show positive results. InvestingPro data shows nCino maintaining strong revenue growth of ~13% and a healthy gross profit margin of 60%.

Among these initiatives, nCino has expanded its focus in the EMEA region, securing its first customer win in Spain. The company has also renewed its efforts in the credit union market, resulting in six new customer acquisitions and 35 expansions with existing clients.

Cross-selling of mortgage solutions represents another growth avenue, with Truist highlighting that nCino completed over 50 mortgage expansion deals. The firm also observed that macroeconomic headwinds that previously affected nCino appear to be diminishing.

While organic subscription revenue growth accelerated to 10% year-over-year, an improvement of one percentage point, Truist maintained its Hold rating due to second-half comparison dynamics that will likely delay definitive growth reacceleration until fiscal year 2027.

In other recent news, nCino Inc. reported second-quarter results that surpassed expectations, leading to a series of stock price target upgrades by several financial firms. Piper Sandler raised its target to $34, highlighting a $5.3 million subscription revenue beat, the largest since 2022, driven by improved mortgage volumes. Keefe, Bruyette & Woods also increased their target to $34.50, noting that nCino’s subscription revenue exceeded the high end of guidance by 3.4% and consensus estimates by 4.1%. Needham set a new target of $38, citing strong performance across key metrics and increased third-quarter guidance. Raymond James adjusted its target to $36, emphasizing the company’s largest top-line beat in years and a positive outlook on the macroeconomic environment. Morgan Stanley raised its target to $35, acknowledging nCino’s fiscal second-quarter performance exceeded their expectations and adjusting their estimates for continued outperformance. These developments reflect the company’s robust financial performance and optimistic future projections.

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