nCino (NCNO) Initiating Coverage

Mission-critical SaaS with accelerating growth, at a reasonable price

This post was published prior to this platform’s re-branding as Sophon Microcap Atlas (with an exclusive focus on sub-$500M market cap companies). Coverage of NCNO is moving to our sister publication - AlphaArk

Disclaimer: This is not investment advice

The opportunity at nCino (NCNO)

You can buy NCNO today at a reasonable price: 25x NTM EBITDA.

An investment in NCNO is a bet on successful transformation of its revenue/pricing model, significant OpEx cost reductions & additional margin expansion as it reaches scale, and a reversal of market pessimism regarding the name.

nCino is a cloud-based SaaS provider that streamlines lending, account opening, and compliance processes for financial institutions.

NCNO’s platform, built on Salesforce’s Force.com (similar to Veeva) and increasingly AWS for cross-sell products, provides mission-critical loan origination software for clients like banks, credit unions, and mortgage lenders. Loan issuance is highly complicated and regulated, but most banks use legacy technology from the 1980s or manage workflows manually using Microsoft Excel. NCNO’s end users state that the software counts as one of the most important pieces of its technology stack.