BofA lifts nCino stock price target to $30, maintains neutral rating

BofA Securities raised its price target on nCino (NCNO) to $30 from $28, maintaining a Neutral rating, after the company's Q1 results exceeded expectations with revenue of $144.1 million and EPS of $0.16. While nCino's Q1 performance and increased full-year guidance signal improved execution, analysts, including those at Goldman Sachs and Morgan Stanley who also adjusted their price targets, remain cautiously optimistic, awaiting more evidence of consistent double-digit organic subscription revenue growth and resolution of execution issues before turning more bullish on the stock.

Analysis

nCino (NASDAQ:NCNO) demonstrated improved operational execution in its first quarter of fiscal year 2026, reporting revenues of $144.1 million and earnings per share (EPS) of $0.16, surpassing both Wall Street and BofA Securities' expectations. This performance was underpinned by a 14% year-over-year increase in subscription revenue to $125.6 million. The company's financial health is also indicated by reported overall revenue of $540.66 million and an associated gross profit margin of 60%, suggesting promising underlying fundamentals. In response to the strong quarter, BofA Securities raised its price target to $30 from $28, Goldman Sachs to $27, and Morgan Stanley to $29, while JMP Securities maintained a Market Outperform rating with a $32 target. However, despite these upward revisions and a slight increase in nCino's full-year FY26 guidance, a tone of cautious optimism persists. BofA and Goldman Sachs retained Neutral ratings, highlighting the need for more consistent evidence that execution issues are fully resolved and that nCino can achieve sustained double-digit organic subscription revenue growth; Goldman Sachs specifically noted concerns over top-line indicators like billings and organic subscription revenue. The company, currently trading around $26.78 and having experienced a strong recent month despite a significant decline over the past six months, is not yet profitable, though analysts predict profitability this year with net income expected to grow. nCino's management has undertaken strategic initiatives, including a reduction in force, and their conservative guidance strategy is seen by BofA as potentially paving the way for future "beat-and-raise" scenarios, offering some reassurance after recent uncertainty.

Key Decisions for Investors

• Acknowledge nCino's positive Q1 FY26 results and increased full-year guidance, but consider the cautious analyst sentiment and Neutral ratings which highlight persistent execution risks.
• Investors should closely monitor nCino's ability to deliver consistent double-digit organic subscription revenue growth and resolve execution issues in subsequent quarters before increasing exposure.
• Given the balanced risk/reward profile noted by analysts, maintaining current positions or waiting for further validation of operational improvements and sustained profitability may be a prudent approach.