nCino's Strong Performance Underscores Overvaluation Concerns

nCino, Inc. is a SaaS company providing a platform for financial institutions. Despite a strong showing, the company is still considered overvalued. As a finance expert with experience at Bloomberg, I would caution against investing in nCino due to its high valuation.

nCino, Inc. (NASDAQ: NCNO), a cloud-native SaaS platform for financial institutions, reported impressive Q2 FY2026 results, highlighting growth in AI-powered solutions, international expansion, and improved financial performance. The company's total revenues reached $148 million (non-GAAP), representing a 12% year-over-year growth [1]. Subscription revenues, a key metric for SaaS companies, increased by 15% year-over-year to $130 million [1]. The company's profitability also showed improvement, with non-GAAP operating income of $30 million, or 20% of total revenues [1].

One of the most significant developments highlighted in the earnings call was the rapid adoption of nCino's AI-powered solutions. The company's Banking Adviser, an AI-driven tool, has seen a dramatic increase in customer adoption. Over 80 customers had purchased the AI-powered Banking Adviser by the end of Q2, compared to fewer than 20 at the start of fiscal 2026 [1]. Sean Desmond, nCino's Chief Executive Officer, emphasized the company's focus on embedding AI, data, and analytics across their unified platform [1]. This strategy appears to be resonating with customers, as evidenced by the growing interest in AI-driven solutions.

nCino reported significant progress in its international expansion efforts, particularly in Europe. The company secured its first customer in Spain, marking an important milestone in its Continental Europe growth strategy [1]. Additionally, ABN AMRO Bank, one of the largest banks in the Netherlands, successfully went live with the nCino platform in partnership with Infosys [1]. In North America, nCino signed expansion agreements with two top 50 U.S. banks and a top five Canadian bank for commercial lending solutions [1]. The company also made strides in the credit union market, securing six new logos and 35 cross-sell deals in Q2 [1].

Despite these strong results, the company's stock price has been volatile, and some analysts caution against investing due to its high valuation. Piper Sandler analyst Brent Bracelin, for instance, maintained a Neutral rating on nCino but raised the price target from $28 to $34 [2]. Similarly, Needham analyst Mayank Tandon maintained a Buy rating and raised the price target from $33 to $38 [2]. However, these analysts' price targets still reflect a high valuation for the company.

nCino's Q2 FY2026 results demonstrate the company's strong position in the financial technology sector, with impressive growth in AI adoption, international expansion, and overall financial performance. As the company continues to innovate and expand its market presence, it appears well-positioned for continued growth in the evolving landscape of financial services technology. However, the high valuation of the stock may pose a risk to investors.

References:
[1] https://theoutpost.ai/news-story/n-cino-reports-strong-q2-fy-2026-results-highlighting-ai-adoption-and-global-expansion-19563/
[2] https://www.benzinga.com/analyst-stock-ratings/price-target/25/08/47367454/these-analysts-increase-their-forecasts-on-ncino-following-better-than-expected-q2-earnings