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Vertical Software Stocks Q3 Results: Benchmarking nCino (NASDAQ:NCNO)


Adam Hejl /
2022/01/14 6:00 am EST
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As we reflect back on the just completed Q3 vertical software sector earnings season, we dig into the relative performance of nCino (NASDAQ:NCNO) and its peers.

Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, there are industries that have very specific needs. Whether it is life-sciences, education or banking, the demand for so called vertical software, addressing industry specific workflows, is growing, fueled by the pressures on improving productivity and quality of offerings.

The 13 vertical software stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 4.23%, while on average next quarter revenue guidance was 3.87% above consensus. The whole tech sector has been facing a sell-off since late last year and vertical software stocks have not been spared, with share price down 33.9% since earnings, on average.

nCino (NASDAQ:NCNO)

Founded in 2011 in North Carolina, nCino (NASDAQ:NCNO) makes cloud-based operating systems for banks and provides that software as a service.

nCino reported revenues of $70 million, up 29.1% year on year, beating analyst expectations by 5.12%. It was a solid quarter for the company, with a confident beat of analyst estimates and a strong top line growth.

“The third quarter was another strong quarter for nCino as we added new logos across the U.S. and multiple international markets, including our first customer in Japan, and also signed expanded contracts with existing nCino customers,” said Pierre Naudé, nCino’s Chief Executive Officer.

nCino Total Revenue

The stock is down 18.7% since the results and currently trades at $48.05.

Is now the time to buy nCino? Access our full analysis of the earnings results here, it's free.

Best Q3: Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading professional network for U.S. medical professionals.

Doximity reported revenues of $79.3 million, up 75.8% year on year, beating analyst expectations by 7.9%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

Doximity Total Revenue

Doximity achieved the highest full year guidance raise among its peers. The stock is down 37.2% since the results and currently trades at $47.99.

Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Adobe (NASDAQ:ADBE)

One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.

Adobe reported revenues of $4.11 billion, up 20% year on year, in line with analyst expectations. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations and also an underwhelming revenue guidance for the next quarter.

Adobe had the weakest full year guidance update in the group. The stock is down 17.8% since the results and currently trades at $517.99.

Read our full analysis of Adobe's results here.

2U (NASDAQ:TWOU)

Originally named 2tor after the founder's dog Tor, 2U (NASDAQ:TWOU) provides software for universities and colleges to deliver online degree programs and courses.

2U reported revenues of $232.3 million, up 15.5% year on year, in line with analyst expectations. It was a decent quarter for the company, with a meaningful improvement in gross margin but a slower revenue growth.

2U had the weakest performance against analyst estimates and slowest revenue growth among the peers. The stock is down 38.5% since the results and currently trades at $16.45.

Read our full, actionable report on 2U here, it's free.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.12 billion, up 18.2% year on year, in line with analyst expectations. It was a difficult quarter for the company, with revenue guidance for the next quarter slightly missing analyst estimates.

The stock is down 14.3% since the results and currently trades at $260.50.

Read our full, actionable report on Autodesk here, it's free.

The author has no position in any of the stocks mentioned