2 Reasons to Avoid nCino Stock and 1 Reason to Buy After Q4 Earnings

Investing in fresh IPO stocks can be tough. nCino (NASDAQ: NCNO) is a perfect example. This is a high-growth cloud software company and has some powerful friends. It was built with salesforce.com's (NYSE: CRM) platform, and Salesforce remains an investor in and partner with nCino for the financial services industry. Nevertheless, shares are well below where they were when they made their publicly traded debut last summer.

To be clear, this software-as-a-service firm deserves to be on your radar as it helps banks and financial institutions around the globe get updated for the digital era. But I'm still not buying -- yet. Here are two reasons not to buy, along with one reason to buy anyway if you're looking at the long-term potential for this small software tech outfit.

nCino recently put the wraps on its 2021 fiscal year (the 12 months ended Jan. 31, 2021), and results were impressive. Revenue was 48% higher than the year before, increasing to $204 million. The company's free cash flow also improved to $4.88 million compared with negative $14.8 million last year.

Source Fool.com