Strong week for nCino (NASDAQ:NCNO) shareholders doesn't alleviate pain of three-year loss
nCino, Inc. (NASDAQ:NCNO) shareholders should be happy to see the share price up 29% in the last month. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 54% in the last three years. So it is really good to see an improvement. After all, could be that the fall was overdone.
On a more encouraging note the company has added US$173m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.
Check out our latest analysis for nCino
Given that nCino didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last three years, nCino saw its revenue grow by 34% per year, compound. That's well above most other pre-profit companies. In contrast, the share price is down 15% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
nCino is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling nCino stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
nCino shareholders are up 5.3% for the year. While you don't go broke making a profit, this return was actually lower than the average market return of about 18%. The silver lining is that the recent rise is far preferable to the annual loss of 15% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. It's always interesting to track share price performance over the longer term. But to understand nCino better, we need to consider many other factors. Even so, be aware that nCino is showing 3 warning signs in our investment analysis , you should know about...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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