nCino, Inc.'s (NASDAQ:NCNO) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at nCino, Inc.'s (NASDAQ:NCNO) future prospects. nCino, Inc., a software-as-a-service company, provides cloud-based software applications to financial institutions in the United States and internationally. The US$4.0b market-cap company posted a loss in its most recent financial year of US$42m and a latest trailing-twelve-month loss of US$34m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which nCino will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for nCino

Consensus from 15 of the American Software analysts is that nCino is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$883k in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 93% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving nCino's growth isn’t the focus of this broad overview, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 5.1% 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:

There are key fundamentals of nCino which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at nCino, take a look at nCino's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. 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.
2. 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.
3. 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.