Bill.com Stock Jumps After Q4 Earnings: 4 Analysts React To Accelerating Organic Growth, Divvy Momentum

Bill.com Holdings Inc BILL shares rallied Friday after the company reported better-than-expected fourth-quarter sales numbers.

On Thursday, Bill.com reported a fourth-quarter adjusted EPS loss of 7 cents, worse that consensus analyst estimates of a 4-cent loss. Revenue for the quarter was $78.3 million, beating analyst expectations of $62 million. Sales were up 86% from a year ago.

Bill.com reported $41.7 billion in total payment volume in the quarter, up 64% year-over-year. Total customer transactions were up 46% to 8.2 million. For the full fiscal year, Bill.com processed 29.2 million total transactions, up 22%.

Looking ahead, Bill.com guided for fiscal first-quarter revenue of between $103.2 million and $104.2 million, far exceeding analyst estimates of $67.1 million.

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Big Divvy Contributions: KeyBanc analyst Josh Beck said Bill.com reported a high-quality organic revenue beat.

“While we had previously struck an optimistic tone on Divvy, early momentum is surpassing our expectations with our FY22 estimate of about $146M on estimated growth approaching 100% y/y,” Beck wrote.

Piper Sandler analyst Brent Bracelin said Divvy’s annual recurring revenue rate jumped from $100 million to $120 million in June.

“FY22 mid-point guidance of $478M implies BILL could be on track to nearly 5x revenue in just three years, cementing its leadership position in AP automation and B2B payments through robust organic growth coupled with the first full-year contribution from the Divvy expense card acquisition,” Bracelin wrote.

Core Investment Holding: Needham analyst Scott Berg said the large spike in transactions was the highlight of the quarter.

“Bill.com reported what we believe might be its most impressive quarter to date, with transaction volume increasing 14% q/q driving significant revenue outperformance even after excluding limited Divvy contribution,” Berg wrote.

Oppenheimer analyst Brian Schwartz said Bill.com is emerging as a strategic financial platform and should be a core investment holding.

“The company has efficient go-to-market strategies and a broad-and-expanding platform that spans payments, A/R, spend management, artificial intelligence and analytics, which we view as core competitive differentiators, and foretell future share-gains for many years to come,” Schwartz wrote.

Bill.com Ratings, Price Targets:

• Needham has a Buy rating and raised the price target from $215 to $280. 
• Oppenheimer has an Outperform rating and raised the price target from $175 to $270. 
• KeyBanc has an Overweight rating and raised the price target from $175 to $275. 
• Piper Sandler has an Overweight rating and raised the price target from $180 to $280. 

BILL Price Action: Bill.com shares were up 30.24% at $285.29 Friday.