Analysts Expect Breakeven For nCino, Inc. (NASDAQ:NCNO) Before Long
Analysts predict that nCino, Inc. (NASDAQ:NCNO) may reach breakeven by 2028, following a loss of US$38m in the last financial year. The company, with a market cap of US$3.1b, is expected to grow at an average rate of 96% annually to achieve profitability. nCino has managed its capital prudently, with only 19% of its equity funded by debt, reducing investment risks. Investors are advised to consider the company's valuation and management team for a deeper understanding of its potential.
We feel now is a pretty good time to analyse nCino, Inc.'s (NASDAQ:NCNO) business as it appears the company may be on the cusp of a considerable accomplishment. nCino, Inc., a software-as-a-service company, provides software solutions to financial institutions in the United States, the United Kingdom, and internationally. With the latest financial year loss of US$38m and a trailing-twelve-month loss of US$29m, the US$3.1b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is nCino's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
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nCino is bordering on breakeven, according to the 16 American Software analysts. They anticipate the company to incur a final loss in 2027, before generating positive profits of US$45m in 2028. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2028? Working backwards from analyst estimates, it turns out that they expect the company to grow 96% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for nCino given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
View our latest analysis for nCino
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 19% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on nCino, so if you are interested in understanding the company at a deeper level, take a look at nCino's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:
- Valuation: What is nCino worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether nCino is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on nCino’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.