Goldman Sachs: nCino Inc. (NCNO.US) — F1Q27 Core Reacceleration Encouraging, AI Proof Points Still Early
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Goldman Sachs maintains a Buy rating on nCino with a target price of 45 dollars following first-quarter results that showcased encouraging reacceleration in the core business. Subscription revenue grew twelve percent year-over-year to 142 million dollars, exceeding both consensus estimates and company guidance of 139 to 141 million dollars. The firm highlights the current valuation as highly attractive.
Management raised full-year fiscal 2027 subscription revenue guidance to a range of 582 to 585 million dollars, implying eleven to twelve percent annual growth. This upward revision reflects improving demand conditions, particularly driven by international banking digitalization. International subscription revenue expanded eighteen percent, outpacing North American growth of ten percent. Net revenue retention remained stable at 105 percent.
Artificial intelligence features, including intelligent document processing, have been launched with fifty customers in trial phases. However, only five have converted to paid tiers, and revenue contribution remains negligible. Non-GAAP operating margins improved by three percentage points to twelve percent, demonstrating clear operating leverage and cost discipline.
Goldman notes that nCino trades at approximately 5.5 times enterprise value to revenue, well below the software peer group median of seven times. The market appears overly concerned about growth deceleration. While artificial intelligence capabilities provide a long-term call option, key near-term risks include potential contractions in banking information technology spending, intensifying competition, and slower AI monetization.
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