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Q3 Earnings Highlights: nCino (NASDAQ:NCNO) Vs The Rest Of The Vertical Software Stocks


Radek Strnad /
2023/01/24 3:23 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 11 vertical software stocks we track reported a weaker Q3; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 2.32% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but vertical software stocks held their ground better than others, with the share prices up 13.6% since the previous earnings results, 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 $105.2 million, up 50.3% year on year, beating analyst expectations by 1.78%. It was a mixed quarter for the company, with exceptional revenue growth but underwhelming revenue guidance for the next quarter.

“Our team executed extremely well in the third quarter, again exceeding both top and bottom-line expectations,” said Pierre Naudé, Chairman and Chief Executive Officer of nCino.

nCino Total Revenue

The stock is up 2.87% since the results and currently trades at $26.83.

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

Best Q3: Toast (NYSE:TOST)

Founded by three MIT engineers at a local Cambridge bar, Toast (NYSE:TOST) provides integrated point of sale (POS) hardware, software, and payments solutions for restaurants.

Toast reported revenues of $752 million, up 54.6% year on year, beating analyst expectations by 4.31%. It was a very strong quarter for the company, with a significant improvement in gross margin and exceptional revenue growth.

Toast Total Revenue

Toast scored the fastest revenue growth among its peers. The stock is up 11.7% since the results and currently trades at $22.34.

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

Weakest Q3: Upstart (NASDAQ:UPST)

Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.

Upstart reported revenues of $157.2 million, down 31.2% year on year, missing analyst expectations by 7.2%. It was a weak quarter for the company, with declining revenue and underwhelming guidance for the next quarter.

Upstart had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 2.46% since the results and currently trades at $18.59.

Read our full analysis of Upstart's results here.

Matterport (NASDAQ:MTTR)

Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real world spaces into 3D visualization.

Matterport reported revenues of $37.9 million, up 37.3% year on year, beating analyst expectations by 5.69%. It was a very strong quarter for the company, with exceptional revenue growth and guidance for the next quarter above analysts' estimates.

Matterport scored the strongest analyst estimates beat among the peers. The company added 41,000 customers to a total of 657,000. The stock is up 2.14% since the results and currently trades at $3.09.

Read our full, actionable report on Matterport 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 $1.28 billion, up 13.6% year on year, inline with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.

The stock is up 0.72% since the results and currently trades at $210.4.

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

The author has no position in any of the stocks mentioned