We assign a fundamental rating of 4 out of 10 to NCNO. NCNO was compared to 278 industry peers in the Software industry. The financial health of NCNO is average, but there are quite some concerns on its profitability. NCNO has a decent growth rate and is not valued too expensively.

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.
NCNO had a positive operating cash flow in the past year.
In the past 5 years NCNO always reported negative net income.
The reported operating cash flow has been mixed in the past 5 years: NCNO reported negative operating cash flow in multiple years.

1.2 Ratios

The Return On Assets of NCNO (-1.39%) is comparable to the rest of the industry.
With a Return On Equity value of -2.09%, NCNO perfoms like the industry average, outperforming 55.76% of the companies in the same industry.
With a Return On Invested Capital value of 0.31%, NCNO perfoms like the industry average, outperforming 58.63% of the companies in the same 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

The Operating Margin of NCNO (0.90%) is comparable to the rest of the industry.
With a Gross Margin value of 60.33%, NCNO is not doing good in the industry: 62.95% of the companies in the same industry are doing better.
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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
The debt/assets ratio for NCNO is higher compared to a year ago.

2.2 Solvency

NCNO has an Altman-Z score of 2.87. 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 has a Altman-Z score of 2.87. This is in the better half of the industry: NCNO outperforms 61.15% of its industry peers.
The Debt to FCF ratio of NCNO is 4.27, which is a neutral value as it means it would take NCNO, 4.27 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.27, NCNO is in the better half of the industry, outperforming 60.07% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that NCNO is not too dependend on debt financing.
NCNO has a Debt to Equity ratio (0.24) which is in line with its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.24
Debt/FCF	4.27
Altman-Z	2.87

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.
NCNO has a worse Current ratio (1.01) than 73.38% of its industry peers.
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.
NCNO has a worse Quick ratio (1.01) 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

NCNO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.00%, which is quite good.
The Revenue has grown by 12.14% in the past year. This is quite good.
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

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

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

With a Price/Earnings ratio of 26.36, NCNO can be considered very expensive at the moment.
Based on the Price/Earnings ratio, NCNO is valued a bit cheaper than 63.31% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.32, NCNO is valued at the same level.
A Price/Forward Earnings ratio of 20.39 indicates a rather expensive valuation of NCNO.
Based on the Price/Forward Earnings ratio, NCNO is valued a bit cheaper than 68.35% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NCNO to the average of the S&P500 Index (25.57), 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 ratio is in line with the industry average.
NCNO's Price/Free Cash Flow is on the same level as the industry average.

		Industry Rank	Sector Rank
P/FCF	41
EV/EBITDA	55.06

4.3 Compensation for Growth

NCNO's 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.