NCino's (NCNO) revenue is expected to increase at a roughly 15% compound annual growth rate through 2028 as it pursues a global market opportunity worth more than $18 billion, UBS Securities said Monday.
"The company's attractive financial profile is underpinned by highly recurring subscription revenue with [nearly] 140% subscription revenue retention rates (on average over the last three years), and long-term contracts of [about] 4 years on average, UBS analysts, including Nik Cremo, said in a note to clients.
The firm sees nCino's potential to increase operating margins to about 27% in 2028 from an estimated 13% in 2024.
UBS said that while its 2026 and 2027 revenue outlooks are in-line and 2% above Wall Street's expectations, respectively, it continues to see various upside sources, including the transition to a new pricing model, and a recovery in US mortgage volumes.
The brokerage initiated its coverage of the nCino stock with a buy rating and a $44 price target.
The company's shares were up nearly 2% in recent trading.
Price: 36.15, Change: +0.69, Percent Change: +1.95
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