This Fintech Stock Is Down 70% — But a Hedge Fund Just Boosted Its $66 Million Stake

New York City-based Senvest Management disclosed a significant purchase of nCino (NASDAQ:NCNO) stock on November 14, adding nearly 2.4 million shares and seeing the position value increase by an estimated $63.8 million position from the prior period.

What Happened

According to a filing with the U.S. Securities and Exchange Commission dated November 14, Senvest Management substantially increased its position in nCino (NASDAQ:NCNO) by nearly 2.4 million shares during the third quarter. The move brought its total holding to just over 2.4 million shares valued at $65.6 million as of September 30.

What Else to Know

Senvest's nCino stake accounts for about 2.1% of the fund's 13F reportable AUM.

Top holdings after the filing:

• NASDAQ: WIX: $442.1 million (14.2% of AUM)
• NASDAQ: TSEM: $405 million (13% of AUM)
• NYSE: EPAM: $146 million (4.7% of AUM)
• NYSE: PATH: $145.3 million (4.7% of AUM)
• NASDAQ: ILMN: $134 million (4.3% of AUM)

As of Tuesday, shares of nCino were priced at $24.73, down 33% over the past year and well underperforming the S&P 500, which is up 13% in the same period.

Company Overview

Company Snapshot

• nCino offers cloud-based software solutions for financial institutions, including the nCino Bank Operating System and SimpleNexus platform.
• The company serves a broad range of financial sector clients, from global banks and credit unions to mortgage banks and new market entrants.
• It leverages advanced analytics and artificial intelligence/machine learning (AI/ML) to help clients streamline operations and manage regulatory compliance.

nCino, Inc. operates at scale as a leading SaaS provider for the financial services industry, with a focus on digitizing and automating complex banking processes. The company leverages advanced analytics and AI/ML capabilities to help institutions streamline operations, manage risk, and maintain regulatory compliance. Its integrated platform and diversified client base position it competitively within the financial technology sector.

Foolish Take

Senvest's move seemingly reflects a strong conviction that this beaten-down fintech name might be due for a turnaround. nCino’s latest quarter showed accelerating profitability and renewed customer momentum, including double-digit subscription revenue growth and robust demand for its AI-enabled platform. Those trends give investors a clearer line of sight to durable margin expansion — a key differentiator in a competitive SaaS landscape.

Senvest’s buildout of a full 2.4 million-share position underscores conviction in that trajectory, especially as nCino leans deeper into AI. The company delivered 10% total revenue growth and 11% subscription revenue growth in the third quarter, while expanding GAAP operating margin to 8%, up more than 800 basis points year over year. Non-GAAP operating income rose 42%, reflecting operating leverage and disciplined cost management. Recent wins — including expansions at two U.S. top-50 banks and new customer additions in Japan and Europe — point to broad-based demand across regions and product lines.

For a stock still down more than 70% from 2020 highs, improving fundamentals paired with strategic institutional interest may suggest the early stages of a multi-year recovery thesis.

Glossary

13F reportable assets: U.S. equity holdings that institutional investment managers must disclose quarterly to the SEC on Form 13F.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or firm.
Stake: The ownership interest or amount of shares held in a company by an investor or institution.
Position: The amount of a particular security or asset owned by an investor or fund.
Top holdings: The largest investments in a fund’s portfolio, usually ranked by market value.
SaaS (Software as a Service): A software delivery model where applications are accessed online via subscription, rather than installed locally.
Cloud-based software: Applications and services hosted on remote servers and accessed over the internet, not installed on local devices.
AI/ML (Artificial Intelligence/Machine Learning): Technologies enabling computers to perform tasks that typically require human intelligence, such as learning or problem-solving.
Regulatory compliance: Adhering to laws, regulations, and standards relevant to a specific industry or business.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EPAM Systems, UiPath, Wix.com, and nCino. The Motley Fool recommends Illumina. The Motley Fool has a disclosure policy.