Is BILL Holdings' Post-Earnings Selloff A Buying Opportunity? Analysts Weigh In

Several analysts revised the price forecast on BILL Holdings, Inc.BILL following second-quarter results released on Thursday’s after-hours session.

The company reported revenue of $362.55 million, beating the estimates of $360.23 million and, adjusted EPS of 56 cents, exceeding the consensus of 46 cents.

Bill expects third-quarter revenue of $352.5 million – $357.5 million versus estimates of $360.36 million and adjusted earnings of 35 cents to 38 cents per share versus estimates of 34 cents per share.

It also raised its full-year outlook, expecting revenue of $1.45 billion- $1.47 billion versus estimates of $1.46 billion and adjusted earnings of $1.87 and $1.97 per share.

KeyBanc analyst Alex Markgraff cut the price forecast from $115 to $85 while retaining an Overweight rating.

The analyst writes that his expectations were off, and the stock deserves to decline after the second-quarter results.

While AP/AR TPV growth, customer net adds, and product momentum improved, a sequential drop in take rate across AP/AR and Spend & Expense overshadows these positives, adds the analyst.

The analyst says that management’s visibility into take rate trends now seems weaker than expected, reducing confidence.

Markgraff lowered revenue estimates on TPV/take rate revisions and raised operating income and EPS projections.

Also, Wells Fargo analyst Andrew Bauch maintained an Underweight rating and lowered the price target from $65 to $57.

Meanwhile, Needham analyst Scott Berg writes that Bill beat revenue and EPS expectations and slightly raised full-year guidance, but shares fell ~30% after hours due to an unexpected AR/AP take rate decline from FX headwinds and an unfavorable seasonal payment mix shift.

Needham analyst maintained the Buy rating and the $100 price target. While the FX impact appears temporary, a return to first-quarter take rate levels may take two quarters, per the analyst.

Berg says that stable customer growth, rising TPV per customer, and strong transaction volume indicate solid sales momentum.

Spend & Expense TPV grew over 20%, though total TPV declined Q/Q due to a payment option change at a major online marketing platform, adds the analyst.

Berg writes that planned second-half investments could enhance visibility into a return to 20% core growth.

Canaccord Genuity analyst Joseph Vafi writes that despite a flat third-quarter guidance, the company raised its full-year earnings outlook, backed by a strong track record of guidance execution. The analyst’s Buy rating and $105 price forecast are unchanged.

The analyst adds that some post-market confusion over FY25 guidance revisions may have contributed to the 25%+ selloff, which appears disconnected from fundamentals.

Vafi says that the second quarter benefited from a historic political ad spend surge, creating a tough sequential comparison.

Also, Keefe, Bruyette & Woods analyst maintained the Market Perform rating and lowered the price target from $95 to $77.

Investors can gain exposure to the stock via WisdomTree Cloud Computing Fund WCLD and John Hancock Multifactor Small Cap ETF JHSC.

Price Action: BILL shares are down 32.4% at $65.10 at the last check Friday.

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