We assign a fundamental rating of 4 out of 10 to NCNO. NCNO was compared to 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

NCNO had positive earnings in the past year.
In the past year NCNO had a positive cash flow from operations.
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 has a Return On Assets (-1.39%) which is comparable to the rest of the industry.
NCNO's Return On Equity of -2.09% is in line compared to the rest of the industry. NCNO outperforms 55.76% of its industry peers.
The Return On Invested Capital of NCNO (0.31%) is comparable to the rest of the industry.

		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

NCNO has a Operating Margin (0.90%) which is comparable to the rest of the industry.
NCNO's Gross Margin of 60.33% is on the low side compared to the rest of the industry. NCNO is outperformed by 62.95% of its industry peers.
NCNO's Gross Margin has improved in the last couple of years.

		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

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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.
NCNO has more shares outstanding than it did 1 year ago.
NCNO has more shares outstanding than it did 5 years ago.
NCNO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.88 indicates that NCNO is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.88, NCNO is doing good in the industry, outperforming 61.15% of the companies in the same industry.
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 Debt to FCF ratio of 4.27. This is in the better half of the industry: NCNO outperforms 60.07% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that NCNO is not too dependend on debt financing.
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

WACC11.08%

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.
NCNO has a Current ratio of 1.01. This is in the lower half of the industry: NCNO underperforms 73.38% of its industry peers.
A Quick Ratio of 1.01 indicates that NCNO should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.01, NCNO is doing worse than 72.30% of the companies in the same industry.

		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%.
Measured over the past years, NCNO shows a very strong growth in Revenue. The Revenue has been growing by 31.37% on average per year.

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

Based on estimates for the next years, NCNO will show a very strong growth in Earnings Per Share. The EPS will grow by 24.36% on average per year.
Based on estimates for the next years, NCNO will show a quite strong growth in Revenue. The Revenue will grow by 9.18% on average per year.

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.
Compared to an average S&P500 Price/Earnings ratio of 28.39, NCNO is valued at the same level.
The Price/Forward Earnings ratio is 20.39, which indicates a rather expensive current valuation of NCNO.
Based on the Price/Forward Earnings ratio, NCNO is valued a bit cheaper than the industry average as 68.70% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of NCNO to the average of the S&P500 Index (25.72), we can say NCNO is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	26.36
Fwd PE	20.39

4.2 Price Multiples

NCNO's Enterprise Value to EBITDA is on the same level as the industry average.
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.