Why investors have been so cold on nCino stock this week

nCinohis (NCNO 1.53%) the top story in the past few equity trading sessions has been the results for the second quarter of fiscal 2025. While the fintech’s final numbers looked decent when compared to analysts’ projections, there were concerns about its direction . Those concerns led to a sell-off, to the point where as of Friday, before the market opened, the stock price was headed south by nearly 14% for the week to date. This is according to data compiled by S&P Global Market Intelligence.

A double whammy, but poor guidance

Many would probably have been happy with nCino’s news if not for this guidance.

Total revenue and subscription revenue rose in the mid-teens year-over-year to $132.4 million and $113.9 million for the period ended July 31. The fintech’s non-GAAP (adjusted) net loss deepened, but not to an alarming degree for an ambitious young fintech — it was just under $16 million ($0.14 per share), up from 11 million dollars in the period a year ago. Both results beat analysts’ estimates in the past.

nCino provided guidance for its current quarter (third) and full fiscal year 2025. For the quarter, it is targeting revenue of $136 million to $138 million, filtering down to adjusted net income of $0.15 to 0 .16 USD per share. Neither of these ranges look impressive when placed against the average analyst forecast of $138.6 million on the top line and $0.16 for adjusted profitability.

Identified guilty of selling?

Several analysts that follow nCino stock issued research notes on the company following that earnings release. While most reiterated their existing views, one in that pack cut their price target.

That was Needham’s Mayank Tandon, who cut $2 a share from the stock’s fair value assessment for a new level of $40. In his note, Tandon said the company’s remaining performance obligation — that is, revenue for goods/services that have yet to be delivered — fell nearly 3 percent quarter-on-quarter, and in his view, that was likely the key reason of the sale.