nCino, Inc. (NCNO) DCF Valuation & Fundamental Primer
nCino, Inc. (NCNO) currently trades at $25.64 with an enterprise value of $1.94B. Our proprietary institutional model rates nCino, Inc. at 58/100 (Grade: B · Mixed Fundamental Profile). The current market price prices in an implied 5-year revenue CAGR of 41.5% vs. historical growth of 27.5% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of nCino, Inc. (NCNO) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
nCino, Inc. (NCNO) 3-Scenario DCF Valuation Range
Stress-test NCNO's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $25.64).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $17.49 -32% | $18.73 -27% | $20.19 -21% | $21.91 -15% | $23.97 -7% |
| 9.3% | $15.47 -40% | $16.45 -36% | $17.58 -31% | $18.89 -26% | $20.42 -20% |
| 10.0% | $13.81 -46% | $14.60 -43% | $15.49 -40% | $16.52 -36% | $17.70 -31% |
| 10.8% | $12.42 -52% | $13.07 -49% | $13.79 -46% | $14.61 -43% | $15.54 -39% |
| 11.5% | $11.25 -56% | $11.78 -54% | $12.38 -52% | $13.04 -49% | $13.79 -46% |
Institutional Software Quality Scorecard (58/100 · Grade B)
Viable recurring software business but carries notable dilution, lower margins, or higher leverage.
Positive FCF but lower conversion efficiency due to capex or timing
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 0.0% of revenue
Key Operational & Dilution Risks
- Lower software gross margins (60.1%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into NCNO?
The current share price demands 41.5% 5-year CAGR (41.5% net of SBC & dilution)—a +14.0% acceleration over historical run-rate (27.5%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (0.0% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 41.5% 5-year revenue CAGR to justify $25.64/sh on a true per-share economic cash flow basis.
nCino, Inc. (NCNO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $540.7M | $540.7M | $689.6M | $879.6M | $1.12B | $1.43B | $1.83B |
| Gross Profit | $324.8M | $324.8M | $414.2M | $528.4M | $673.9M | $859.6M | $1.10B |
| Operating Income (EBIT) | $-18.1M | $-18.1M | $-23.1M | $-29.5M | $-37.6M | $-47.9M | $-61.1M |
| Stock-Based Compensation (SBC) | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Unlevered Free Cash Flow (FCF) | $52.9M | $52.9M | $67.5M | $86.1M | $109.8M | $140.1M | $178.7M |
| SBC-Adjusted True Cash Flow | $52.9M | $52.9M | $67.5M | $86.1M | $109.8M | $140.1M | $178.7M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -20.9 + 0.64 × (Rule of 40) · R² = 75%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| nCino, Inc. | NCNO | $2.97B | $540.7M | 60.1% | 9.8% | 37.3% | — | 5.8× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 5.8× | $3.15B | $2.97B | $25.64 | 0.0% |
| -20% Multiple Compression | 4.7× | $2.52B | $2.34B | $20.20 | -20.0% |
| -35% Multiple Compression | 3.8× | $2.05B | $1.87B | $16.12 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $2.70B | $2.52B | $21.77 | -14.2% |
Frequently Asked Questions: nCino, Inc. (NCNO) Valuation
What is nCino, Inc. (NCNO)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, nCino, Inc. (NCNO) has a Base Case implied value of $15.16 per share (with a Bear Case of $4.75 and a Bull Case of $30.97), compared to its current price of $25.64. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is nCino, Inc. (NCNO)'s Rule of 40 score and Free Cash Flow margin?
nCino, Inc. achieves a Rule of 40 score of 37.3%, combining a 27.5% revenue growth run-rate with a 9.8% TTM free cash flow margin on $540.7M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into NCNO stock according to Reverse-DCF analysis?
At $25.64 per share (Enterprise Value of $3.15B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 41.5%, compared to nCino, Inc.'s historical CAGR of 27.5%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does nCino, Inc. compare to Software & Cloud Services software peers?
nCino, Inc. (NCNO) earns an institutional Software Quality Score of 58/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact nCino, Inc. (NCNO)'s valuation?
nCino, Inc. recorded $0 in TTM stock-based compensation (15.0% of revenue). When treating SBC as a cash-equivalent compensation expense, nCino, Inc.'s SBC-adjusted free cash flow yield is 1.8%, scoring 25/25 on our Shareholder Dilution Friction pillar.