There's been a notable change in appetite for nCino, Inc. (NASDAQ:NCNO) shares in the week since its quarterly report, with the stock down 14% to US$29.96. Revenues were in line with expectations, at US$132m, while statutory losses ballooned to US$0.10 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, nCino's 15 analysts are now forecasting revenues of US$541.6m in 2025. This would be a credible 7.0% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 13% from last year to US$0.22. Before this latest report, the consensus had been expecting revenues of US$541.7m and US$0.18 per share in losses. While this year's revenue estimates held steady, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at US$37.85, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on nCino, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$30.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that nCino's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past three years. Compare this to the 402 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while nCino's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on nCino. Long-term earnings power is much more important than next year's profits. We have forecasts for nCino going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for nCino that you should be aware of.

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