BTIG has begun its analysis of Bill (BILL, Financial), initiating coverage with a "Buy" rating and setting a price target of $60. The research underscores Bill's role as a leading provider of accounts payable software and payment solutions tailored for small businesses. According to the firm, there is potential for Bill to increase its pricing structure in the coming years. This adjustment could drive revenue growth from 16% in the latest quarter to 20% by fiscal year 2026.
BTIG highlights the significant value Bill's platform brings to small businesses, far exceeding the cost of its services. Furthermore, the firm's analysis describes Bill's product as having strong customer retention capabilities. This stickiness is a key factor in their positive outlook for the company's growth trajectory.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for BILL Holdings Inc (BILL, Financial) is $75.75 with a high estimate of $120.00 and a low estimate of $43.00. The average target implies an upside of 63.32% from the current price of $46.38. More detailed estimate data can be found on the BILL Holdings Inc (BILL) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, BILL Holdings Inc's (BILL, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for BILL Holdings Inc (BILL, Financial) in one year is $158.49, suggesting a upside of 241.72% from the current price of $46.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the BILL Holdings Inc (BILL) Summary page.
BILL Key Business Developments
Release Date: February 06, 2025
- Revenue: $363 million in Q2, up 14% year over year.
- Core Revenue: $320 million, up 16% year over year.
- Non-GAAP Operating Margin: 17%, expanded 3 percentage points year over year.
- Free Cash Flow Margin: 20% in Q2.
- Non-GAAP Net Income: $63 million, representing a 17% margin.
- Non-GAAP Net Income per Share: $0.56 per fully diluted share.
- Float Revenue: $43 million with a yield on FBO funds of 443 basis points.
- Bill AP/AR Revenue: $167 million, up 13% year over year.
- Spend-and-Expense Revenue: $134 million, up 21% year over year.
- Net New Bill AP/AR Customers: 4,500 added in Q2.
- Total Customers: Over 160,000 using BILL AP/AR solution.
- Guidance for Q3 Core Revenue: $317.5 million to $322.5 million, reflecting 13% to 15% growth.
- Guidance for Fiscal 2025 Core Revenue: $1,297 million to $1,312 million, reflecting 16% to 17% growth.
- Guidance for Fiscal 2025 Total Revenue: $1,454 million to $1,469 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BILL Holdings Inc (BILL, Financial) reported a strong financial performance with a 16% year-over-year revenue growth in Q2.
- The company achieved a non-GAAP operating margin of 17%, expanding by 3 percentage points year over year.
- BILL's platform is used by over 480,000 businesses, processing nearly 85 billion in payments volume across 30 million transactions.
- The company is leveraging AI to enhance its platform, eliminating data entry and accelerating payments.
- BILL is expanding its product portfolio, particularly in card offerings, with card adoption among AR customers more than tripling over the past two years.
Negative Points
- BILL faced challenges with FX volatility, which negatively impacted monetization in Q2.
- The company noted a mixed shift towards lower gross interchange merchant categories, affecting card payment volume growth.
- There is increased uncertainty related to potential fiscal and trade policy changes, impacting SMB sentiment and spend.
- BILL's core revenue growth guidance for Q3 is slightly lower than Q2, reflecting a 13% to 15% year-over-year growth.
- The company is experiencing seasonality in TPV trends, with a typically lower spend expected in the March quarter.
