This Fintech Stock Is Down 70% — But a Hedge Fund Just Boosted Its $66 Million Stake

Activist manager Senvest disclosed a nearly 2.4 million-share buy in nCino during Q3, bringing its holding to just over 2.4 million shares valued at $65.6 million as of Sept. 30 (a $63.8 million quarter-to-quarter increase and about 2.1% of its 13F-reportable AUM), signaling concentrated conviction in the beaten-down fintech. The stake build comes as nCino trades at $24.73 (down 33% Y/Y and well below its 2020 highs) even as the company reported 10% total revenue growth, 11% subscription revenue growth, GAAP operating margin expansion to 8% (up >800 bps YoY) and a 42% rise in non-GAAP operating income, plus customer wins and international expansion tied to its AI-enabled platform. For investors, Senvest’s move underscores an institutional bet on a fundamentals-driven turnaround in a SaaS payments/financial-services vendor, though nCino remains loss-making on a TTM net-income basis and has materially underperformed the broader market.

Analysis

Senvest Management disclosed a near 2.4 million-share increase in nCino (NASDAQ: NCNO) during Q3, bringing its total holding to just over 2.4 million shares valued at $65.6 million as of September 30 and representing roughly 2.1% of Senvest’s 13F-reportable AUM; the quarter-to-quarter position value rose by about $63.8 million. nCino shares traded at $24.73 at the time of the report, down 33% over the prior year and markedly underperforming the S&P 500, which rose about 13% over the same period.

Operationally, nCino shows improving fundamentals: TTM revenue of $586.5 million with a TTM net loss of $21.8 million, third-quarter total revenue growth of 10% and 11% subscription revenue growth, GAAP operating margin expanded to 8% (up >800 bps YoY), and a 42% increase in non-GAAP operating income. Management reported customer expansions at two U.S. top-50 banks and new clients in Japan and Europe, and the firm is emphasizing AI-enabled capabilities through its Bank Operating System and SimpleNexus platform.

Senvest’s sizable build implies conviction that margin expansion and subscription momentum can drive a multi-year recovery, but material downside risks remain: the stock is still well below 2020 highs and nCino remains loss-making on a TTM basis. Key near-term catalysts to watch are continued subscription growth, sustained GAAP margin improvement, cash-flow trends and further institutional buying; failure on any of these would undercut the turnaround thesis.

Key Decisions for Investors

• Consider a selective, size-constrained long exposure to NCNO given improving Q3 fundamentals and Senvest’s conviction, but limit position size until multiple quarters confirm GAAP profitability and positive free cash flow
• Monitor next quarterly report for continued subscription revenue growth, further margin expansion and customer wins in the U.S. and international markets as primary catalysts to increase exposure
• If you already hold a material position, consider hedging downside risk or trimming to a tactical weight pending confirmation of sustained operating leverage and cash-flow improvement