NCino (NCNO) issued a weaker-than-expected fiscal 2026 outlook due to international booking challenges, a lengthy DocFox integration process, and continued US mortgage market softness, Morgan Stanley said in a note to clients Wednesday.

The company said late Tuesday in its fiscal Q4 results it expects fiscal 2026 non-GAAP diluted EPS of $0.66 to $0.69 on revenue of $574.5 million to $578.5 million. Analysts surveyed by FactSet forecast EPS of $0.88 on revenue of $612.1 million.

Morgan Stanley noted that "the prospect of material subscription revenue growth acceleration (and thereby multiple re-rating) is hard to see."

The investment firm highlighted that while NCino's organic subscription revenue, excluding mortgages, grew 16% in fiscal 2025, the company now expects a sharp slowdown to 9% in fiscal 2026 due to missed internal gross bookings targets internationally and higher churn.

The firm also pointed to DocFox's integration process delaying new subscription revenue growth, with some customers pausing buying decisions until the onboarding process is fully incorporated. While the long-term value proposition of DocFox remains intact, Morgan Stanley said the timeline for meaningful revenue impact is longer than initially expected.

"While we are encouraged by a clean slate on guidance philosophy, we would look to get constructive if we see a path to low-teens organic subscription revenue growth ex. mortgage as the company ramps its new sales force," the note said.

The company also announced a $100 million share repurchase program, which Morgan Stanley interpreted as a signal that management saw the quarter as difficult for investors to digest.

Morgan Stanley kept NCino's equal weight rating and cut the company's price target to $23 from $39.

NCino shares were falling past 23% in recent trading.

Price: 21.59, Change: -6.53, Percent Change: -23.22