Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 8.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 11.9x
- ▸PEG: 0.08
NCNO · Why this verdict
Why nCino (NCNO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company's core platform is built on Salesforce infrastructure, creating a single-supplier dependency that constrains pricing power, exposes the business to Salesforce's strategic decisions, and limits the ability to migrate customers to proprietary technology. Bear case | The Salesforce revenue dependency is reduced such that non-Salesforce-dependent revenue streams account for more than 30% of total revenue within 12 months. | →Stable |
| CounterDeep Salesforce integration can also be a distribution moat — customers already in the Salesforce ecosystem are natural acquisition targets, and the partnership may be a competitive advantage rather than a vulnerability. | ||
nCino converts free cash flow at 1,000% of net income, indicating that GAAP earnings materially understate the company's true cash generation capacity, and has beaten earnings consensus in all 4 recent quarters with an average surprise of 178%. Quality breakdown | Free cash flow conversion remains above 300% of net income and the company beats consensus EPS in at least 3 of the next 4 quarters. | →Stable |
| CounterA 1,000% FCF-to-net-income ratio in a software company typically reflects large non-cash charges like stock-based compensation rather than genuine operating superiority, which dilutes shareholders while inflating the FCF metric. | ||
The stock is in a confirmed downtrend with a 200-day moving average slope of -8.2% per month, a death-cross pattern blocking new entry, and a falling on-balance volume — indicating active institutional distribution at current price levels. Momentum breakdown | The 200-day moving average slope turns positive and the stock reclaims its 200-day moving average within 6 months, confirming a trend reversal. | →Stable |
| CounterA death-cross pattern in a stock with 36% analyst upside and a PEG of 0.07 may represent a temporary washout of short-duration holders ahead of a fundamental re-rating. | ||
Analysts see 36% to 57% upside to the current price, the stock trades at a PEG of 0.07 on a forward P/E of 9.7x, and the asymmetry ratio of 2.64 implies 36% upside versus 14% downside — providing a compelling fundamental case for patient investors willing to wait for the technical setup to recover. Sentiment breakdown | Analyst price target consensus rises at least 15% and the stock closes the gap to analyst targets by more than 20 percentage points within 12 months. | →Stable |
| CounterA 4.22 put-to-call ratio in the options market indicates that professional traders are positioned far more bearishly than the analyst community, suggesting the upside case may be less credible than it appears. | ||
The company's core platform is built on Salesforce infrastructure, creating a single-supplier dependency that constrains pricing power, exposes the business to Salesforce's strategic decisions, and limits the ability to migrate customers to proprietary technology.
→StableBear case
- Expectation
- The Salesforce revenue dependency is reduced such that non-Salesforce-dependent revenue streams account for more than 30% of total revenue within 12 months.
CounterDeep Salesforce integration can also be a distribution moat — customers already in the Salesforce ecosystem are natural acquisition targets, and the partnership may be a competitive advantage rather than a vulnerability.
nCino converts free cash flow at 1,000% of net income, indicating that GAAP earnings materially understate the company's true cash generation capacity, and has beaten earnings consensus in all 4 recent quarters with an average surprise of 178%.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 300% of net income and the company beats consensus EPS in at least 3 of the next 4 quarters.
CounterA 1,000% FCF-to-net-income ratio in a software company typically reflects large non-cash charges like stock-based compensation rather than genuine operating superiority, which dilutes shareholders while inflating the FCF metric.
The stock is in a confirmed downtrend with a 200-day moving average slope of -8.2% per month, a death-cross pattern blocking new entry, and a falling on-balance volume — indicating active institutional distribution at current price levels.
→StableMomentum breakdown
- Expectation
- The 200-day moving average slope turns positive and the stock reclaims its 200-day moving average within 6 months, confirming a trend reversal.
CounterA death-cross pattern in a stock with 36% analyst upside and a PEG of 0.07 may represent a temporary washout of short-duration holders ahead of a fundamental re-rating.
Analysts see 36% to 57% upside to the current price, the stock trades at a PEG of 0.07 on a forward P/E of 9.7x, and the asymmetry ratio of 2.64 implies 36% upside versus 14% downside — providing a compelling fundamental case for patient investors willing to wait for the technical setup to recover.
→StableSentiment breakdown
- Expectation
- Analyst price target consensus rises at least 15% and the stock closes the gap to analyst targets by more than 20 percentage points within 12 months.
CounterA 4.22 put-to-call ratio in the options market indicates that professional traders are positioned far more bearishly than the analyst community, suggesting the upside case may be less credible than it appears.
TrendMatrix Research · core thesis
Engine thesis — one sentence
nCino has beaten earnings estimates in all 4 recent quarters with an average surprise of 178%, generates free cash flow at 1,000% of net income (meaning it converts far more cash than GAAP earnings suggest), and trades with 36% analyst upside at a PEG of 0.07 — yet the stock is in a confirmed downtrend below its 200-day moving average with a 15% short interest and a highly concentrated dependency on Salesforce as its core infrastructure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.6 |
| ROA | 0.8 |
| Gross margin | 8.3 |
| Op margin | 5.3 |
| Net margin | 1.1 |
| Current ratio | 3.6 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 10.0 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 2.2 |
- ▸Overbought bear rally (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -8.9%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 8.7 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 32%
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $2,298,501 (0.118% of mkt cap)
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 3.2 |
| growth rank | 3.3 |
Technical
0.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.9 |
| 52w position | 0.5 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.1 |
| days to cover | 6.4 |
| volatility | 0.0 |
| put call | 9.4 |
| implied vol | 0.5 |
| beta | 8.9 |
| debt equity | 8.7 |
- ▸High short interest: 16%
- ▸High IV: 77%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:53d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.0<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.2>=5.0 recovering
Reward-to-Risk
0.97
Upside
+14.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 73
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -48% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.0<1.5@spot) reinforce the read. Current asymmetry R:R is 0.97 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.6, Catalyst at 7.5, and Sentiment at 7.1; the weakest are Technical at 0.5, Peer rank at 2.3, and Insider at 3.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Fcf Conversion Perfect Beats
Trip ifFree cash flow conversion falls below 200% of net income for 2 consecutive quarters or the company misses consensus EPS in 2 or more of the next 4 quarters.
- P2Salesforce Dependency Concentration Risk
Trip ifSalesforce-related revenue concentration increases above 80% of total revenue for 2 consecutive quarters.
- P3Confirmed Downtrend Death Cross
Trip ifThe 200-day moving average slope remains more than 5% negative per month for 9 consecutive months from today.
- P4Large Analyst Upside Low Peg
Trip ifAnalyst price target consensus declines more than 20% from current levels or upside to target falls below 15%.