nCino sharply raises its IPO price range, boosting possible valuation to $2.6B – ProWellTech
As expected, the fintech company nCino has increased its IPO price range. The North Carolina-based banking software company now expects to sell its shares between $ 28 and $ 29 per share, far more than its initial price range of $ 22 to $ 24 per share.
At its price range of $ 28 to $ 29 per share, nCino it is worth from $ 2.50 to $ 2.59 billion, significantly higher than the previous $ 1.96 billion to $ 2.14 billion.
The valuation makes more sense for the company, given its growth rate, revenue scale and the way the market is currently evaluating similar companies. As ProWellTech wrote earlier this week, regarding the scale and value of the SaaS company (emphasize ours):
Annualize the company’s first quarter revenue results (30 April 2020 period), The execution rate of $ 178.9 million nCino would give it a multiple of the revenue from 11x to 12x at its expected IPO prices, a rather modest result according to current standards.
In fact, since nCino has grown by about 50% from the 1st quarter of 2019 to the 1st quarter of 2020, it seems light. The company’s GAAP losses are also reduced compared to revenues for a SaaS business, although the company’s operating liquidity has grown from $ 4.6 million in its fiscal year ending January 31, 2019 to $ 9 million in its next year tax. His numbers are mostly good, with some results far from perfect. However, given its growth rate, a multiple of 11x-12x revenue seems modest; this figure obviously increases if we use a final revenue figure instead of our annualized number.
It would not be a shock, therefore, if nCino had as its target a higher price range for its shares before it formally listed.
With its new IPO price range, the multiple of nCino’s implied earnings is now from 14x to 14.5x, figures that seem much closer to today’s standards.
Now the question for nCino, which is expected to be listed and traded next week, is whether it can quote above its raised range. Given a recent historical precedent, a beat in the price of $ 1 per share above its raised range would not be a shock.
nCino is one of the two companies that we are currently monitoring towards public markets. The other is GoHealth, which is expected to be made public around the same time. Expect the next week to be chock full of IPO news. Go into the profit season no less!