NCNO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 278 industry peers in the Software industry. While NCNO seems to be doing ok healthwise, there are quite some concerns on its profitability. NCNO has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year NCNO was profitable.
NCNO had a positive operating cash flow in the past year.
In the past 5 years NCNO always reported negative net income.
In multiple years NCNO reported negative operating cash flow during the last 5 years.

1.2 Ratios

NCNO's Return On Assets of -1.39% is in line compared to the rest of the industry. NCNO outperforms 51.80% of its industry peers.
NCNO has a Return On Equity (-2.09%) which is in line with its industry peers.
NCNO has a Return On Invested Capital (0.31%) which is in line with its industry peers.

		Industry Rank	Sector Rank
ROA	-1.39%
ROE	-2.09%
ROIC	0.31%

ROA(3y)-4.42%

ROA(5y)-4.85%

ROE(3y)-5.85%

ROE(5y)-6.34%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With a Operating Margin value of 0.90%, NCNO perfoms like the industry average, outperforming 59.71% of the companies in the same industry.
NCNO has a Gross Margin of 60.33%. This is in the lower half of the industry: NCNO underperforms 62.95% of its industry peers.
In the last couple of years the Gross Margin of NCNO has grown nicely.

		Industry Rank	Sector Rank
OM	0.9%
PM (TTM)	N/A
GM	60.33%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.42%

GM growth 5Y2.3%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NCNO is destroying value.
Compared to 1 year ago, NCNO has more shares outstanding
NCNO has more shares outstanding than it did 5 years ago.
NCNO has a worse debt/assets ratio than last year.

2.2 Solvency

NCNO has an Altman-Z score of 2.88. This is not the best score and indicates that NCNO is in the grey zone with still only limited risk for bankruptcy at the moment.
NCNO's Altman-Z score of 2.88 is fine compared to the rest of the industry. NCNO outperforms 61.15% of its industry peers.
NCNO has a debt to FCF ratio of 4.27. This is a neutral value as NCNO would need 4.27 years to pay back of all of its debts.
NCNO has a better Debt to FCF ratio (4.27) than 60.07% of its industry peers.
NCNO has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
NCNO has a Debt to Equity ratio of 0.24. This is comparable to the rest of the industry: NCNO outperforms 42.45% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.24
Debt/FCF	4.27
Altman-Z	2.88

ROIC/WACC0.03

WACC11.05%

2.3 Liquidity

NCNO has a Current Ratio of 1.01. This is a normal value and indicates that NCNO is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.01, NCNO is not doing good in the industry: 73.38% of the companies in the same industry are doing better.
NCNO has a Quick Ratio of 1.01. This is a normal value and indicates that NCNO is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of NCNO (1.01) is worse than 72.30% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.01
Quick Ratio	1.01

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 8.00% over the past year.
NCNO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.14%.
The Revenue has been growing by 31.37% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)8%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%47.62%

Revenue 1Y (TTM)12.14%

Revenue growth 3Y25.44%

Revenue growth 5Y31.37%

Sales Q2Q%9.63%

3.2 Future

NCNO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.36% yearly.
The Revenue is expected to grow by 9.18% on average over the next years. This is quite good.

EPS Next Y40%

EPS Next 2Y25.95%

EPS Next 3Y24.36%

EPS Next 5YN/A

Revenue Next Year9.78%

Revenue Next 2Y8.82%

Revenue Next 3Y9.18%

Revenue Next 5YN/A

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 26.36 indicates a quite expensive valuation of NCNO.
63.31% of the companies in the same industry are more expensive than NCNO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of NCNO to the average of the S&P500 Index (28.30), we can say NCNO is valued inline with the index average.
A Price/Forward Earnings ratio of 20.39 indicates a rather expensive valuation of NCNO.
68.70% of the companies in the same industry are more expensive than NCNO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 25.57. NCNO is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	26.36
Fwd PE	20.39

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NCNO is on the same level as its industry peers.
NCNO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NCNO is cheaper than 60.43% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	41
EV/EBITDA	55.16

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NCNO's earnings are expected to grow with 24.36% in the coming years. This may justify a more expensive valuation.