William Blair analyst Christopher Kennedy has maintained their neutral stance on NCNO stock, giving a Hold rating yesterday.
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Christopher Kennedy has given his Hold rating due to a combination of factors that were highlighted during nCino’s annual user conference and investor day. While nCino has developed a robust suite of products and operates in a significant market, the company has faced macroeconomic and internal challenges that have impacted its growth trajectory in recent years. The management has laid out initiatives to enhance internal execution, which could potentially accelerate growth, serving as a positive catalyst for the company. However, shares are currently trading at 5.4 times the estimated revenue for 2026, which suggests a cautious approach.
Despite the absence of long-term revenue growth targets, Kennedy believes that high-single-digit growth is achievable with strong internal execution and new bookings. The large market opportunity, new pricing strategies, reduced revenue churn, and successful sales of new products support this outlook. The company’s guidance for fiscal 2026 indicates a 9%-10% growth in annual contract value, slightly lower than previous years. Additionally, while management is confident in achieving a Rule-of-40 status by fiscal 2027, the current guidance suggests a Rule-of-27 status for fiscal 2026, indicating some room for improvement. Overall, these factors contribute to the Hold rating as the company navigates its growth and execution challenges.