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On Friday, UBS analyst Nik Cremo revised the price target for nCino Inc. (NASDAQ:NCNO) shares, reducing it to $30.00 from the previous $43.00. Despite this change, the firm maintained a Buy rating on the company’s stock. According to InvestingPro data, this target aligns with broader analyst expectations, with current targets ranging from $19 to $32. Cremo’s analysis followed nCino’s release of its fourth fiscal quarter 2025 results, which showed subscription revenue and non-GAAP operating income figures approximately 1% and 1.5% above Street estimates, respectively.
The adjustment in the price target came after nCino provided its fiscal year 2026 guidance, which indicated subscription and total revenue projections approximately 6% below Street expectations. The company forecasted year-over-year subscription revenue growth of about 8% at the midpoint, a significant slowdown from the 13.45% growth achieved in the last twelve months. The stock has reacted sharply to this news, falling nearly 25% in the past week. InvestingPro analysis suggests the stock is currently in oversold territory, with additional insights available in the Pro Research Report. The analyst pointed to several factors contributing to the less optimistic revenue growth outlook for FY 2026.
According to Cremo, the disappointing revenue growth guidance for the upcoming fiscal year was due to several specific challenges. These included missed execution in the mortgage and international bookings sectors. Despite maintaining a healthy gross profit margin of 60% and operating with moderate debt levels, two discrete one-time items are expected to create a headwind in the second half of FY 2026, estimated to impact growth by approximately 2 percentage points. Furthermore, Cremo noted a shift in nCino’s guidance philosophy, with the company expressing a desire to adopt a more conservative approach and de-risk its forecasts as much as possible. This conservative stance is reflected in the fact that 13 analysts have recently revised their earnings expectations downward, as reported by InvestingPro.
This conservative stance contrasts with management’s comments on the health of nCino’s customer base. The company’s executives described their clients as having strong balance sheets and anticipated growth in their loan portfolios, deposits, and earnings. Despite these positive indicators from the customer base, nCino’s guidance reflects a more cautious outlook for the company’s performance in the next fiscal year.
In other recent news, nCino Inc. has been the subject of multiple analyst updates following its latest financial results and guidance. The company reported a revenue of $141.4 million for the fourth quarter of fiscal year 2025, marking a 14% increase from the previous year and slightly exceeding the consensus estimate of $140.9 million. Subscription revenue also grew to $125.0 million, surpassing expectations. However, nCino’s non-GAAP earnings per share (EPS) of $0.12 fell short of the anticipated $0.19, partially due to foreign exchange headwinds.
Several firms have adjusted their ratings and price targets for nCino in light of these developments. Keefe, Bruyette & Woods maintained an Outperform rating but lowered the price target to $28, citing a conservative revenue guide and potential for margin expansion. Goldman Sachs, on the other hand, downgraded the stock to Neutral and reduced the price target to $24, pointing to internal execution challenges and a slowdown in commercial lending activities. Needham also cut its price target to $28 while maintaining a Buy rating, emphasizing the company’s long-term prospects despite near-term challenges.
Citizens JMP kept its Market Outperform rating but adjusted the price target to $32, reflecting mixed fourth-quarter results. Meanwhile, Barclays (LON:BARC) reduced its price target to $24, maintaining an Overweight rating and noting the importance of Annual Contract Value as a real-time indicator of business health. These recent developments underscore the varied analyst perspectives on nCino’s financial outlook and growth potential.
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