nCino‘s (NCNO 1.53%) top news item over the past few stock trading sessions was its second quarter of fiscal 2025 results. While the fintech’s trailing numbers looked decent when matched against analyst projections, there were concerns about its guidance. Those concerns resulted in a sell-off, to the point where as of Friday before market open the stock’s price was heading south by nearly 14% week to date. That’s according to data compiled by S&P Global Market Intelligence.

A double beat, but weak(ish) guidance

Many probably would have been satisfied by nCino’s news if it weren’t for that guidance.

Total revenue and subscription revenue both rose in the mid-teen percentages year over year, coming in at a respective $132.4 million and $113.9 million for the period ended July 31. The fintech’s non-GAAP (adjusted) net loss deepened, but not to an alarming degree for an ambitious young fintech — it was just short of $16 million ($0.14 per share), against $11 million in the year-ago period. Both results edged past analyst estimates.

nCino proffered guidance for its current (third) quarter, and the entirety of fiscal 2025. For the quarter, it’s targeting $136 million to $138 million in revenue, filtering down to adjusted net income of $0.15 to $0.16 per share. Neither of those ranges look impressive when placed against the average pundit forecast of $138.6 million on the top line, and $0.16 for adjusted profitability.

Sell-off culprit identified?

Several analysts tracking nCino stock published research notes on the company in the wake of that earnings release. While most reiterated their existing views, one of that pack cut his price target.

This was Mayank Tandon of Needham, who lopped $2 per share off his fair value assessment of the stock for a new level of $40. In his note, Tandon said the company’s remaining performance obligation — i.e., revenue for goods/services yet to be delivered — fell by nearly 3% quarter over quarter, and in his opinion was likely the key reason for the sell-off.