Why nCino stock is falling today

nCino (NCNO -13.19%) shares are down in Wednesday trading. The company’s share price was down 12.4% as of 1:30 p.m. ET, according to data from S&P Global Market Intelligence.

After the market closed yesterday, nCino released results for the second quarter of its current fiscal year, which ended on July 31. The fintech specialist actually posted sales and earnings results that beat Wall Street’s expectations, but the stock is losing ground today because of management’s third lead. quarterly guidance came in weaker than anticipated.

Despite the sale, nCino delivered solid Q2 results

nCino posted earnings per share of $0.14 on sales of $132.4 million in fiscal Q2, beating the average Wall Street analyst target for earnings per share of $0.13 on sales of $131.04 million . Total sales during the period were up 13% year-over-year, and subscription revenue was up 14% to $113.9 million. The company also posted a non-GAAP (adjusted) operating margin of 15% — an increase of approximately 500 basis points compared to the prior-year period.

nCino said it is seeing strong demand for consumer banking and lending accounts in the US consumer market and also said it sees encouraging trends for its domestic businesses and community and regional segments. The company also noted that demand for its generative artificial intelligence (AI) solution Banking Advisor was a positive performance catalyst in the quarter. nCino indicated that some macroeconomic headwinds continued to persist in the US mortgage and international markets, but expected solid performance in the second half of the year.

Is this an opportunity to buy nCino stock?

Despite the Q2 beat, nCino shares are losing ground today on forward guidance that disappointed investors. For the third quarter, the company expects earnings per share of $0.15 to $0.16 on sales of $136 million to $138 million. Meanwhile, the average analyst estimate was calling for the business to post earnings per share of $0.16 on sales of $138.63 million.

On the other hand, guidance for the full year actually came in line with Wall Street’s median forecast. For the full year, the company is guiding for earnings per share of $0.66 to $0.69 on sales of $538.5 million to $544.5 million. The average analyst estimate indicated earnings per share of $0.67 on sales of $541.72 million.

With full-year earnings estimates slightly ahead of Wall Street’s target and full-year sales slightly below estimates, the market appears to be overreacting to the Q3 guidance miss. For investors looking for an entry point into stocks, today’s pullback could be a worthwhile buying opportunity.