nCino, Inc. (NASDAQ:NCNO) is a financial technology company that provides cloud-based banking solutions. It helps financial institutions streamline their operations and improve customer experiences. In the competitive landscape, nCino faces peers like ZoomInfo Technologies Inc., JFrog Ltd., BigCommerce Holdings, Inc., Bill.com Holdings, Inc., and Jamf Holding Corp. These companies also operate in the tech sector, offering various software solutions.
In evaluating nCino's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. nCino's ROIC is -0.67%, while its WACC is 6.88%. This results in a ROIC to WACC ratio of -0.098, indicating that nCino is not generating returns above its cost of capital. This is a concern for investors who prioritize efficient capital utilization.
Comparatively, ZoomInfo Technologies Inc. shows a positive ROIC of 0.087% against a WACC of 7.74%, resulting in a ROIC to WACC ratio of 0.011. This suggests that ZoomInfo is slightly more efficient in capital utilization than nCino. Despite the small margin, ZoomInfo is the only company among the peers with a positive ROIC, indicating better capital efficiency.
On the other hand, JFrog Ltd. has a significantly negative ROIC of -10.40% and a WACC of 8.69%, leading to a ROIC to WACC ratio of -1.196. This highlights inefficiency in capital utilization, similar to nCino but on a larger scale. BigCommerce Holdings, Inc. also shows poor capital efficiency with a ROIC of -17.93% and a WACC of 7.08%, resulting in a ROIC to WACC ratio of -2.533.
Bill.com Holdings, Inc. and Jamf Holding Corp. also exhibit negative ROICs, with ratios of -0.118 and -0.914, respectively. These figures indicate inefficiencies in capital utilization, similar to nCino. Among the analyzed companies, ZoomInfo stands out as the most efficient in utilizing its capital relative to its cost, despite its marginally positive ROIC.
Read More