BILL Holdings BILL shares have outperformed the Zacks Computer & Technology sector and its Zacks Internet - Software industry peer Intuit INTU in the past month.
While BILL has moved up 5.7%, Intuit has risen 0.3%. The broader sector has dropped 0.8% over the same timeframe.
BILL's robust price performance has been driven by its impressive fiscal fourth-quarter 2024 results.
It registered 16% year-over-year growth in revenues. Core revenues, which included subscription and transaction fees, also rose 16% to $301 million. The upside was supported by BILL's ability to acquire new customers and expand its payment offerings.
BILL Holdings, Inc. Price and Consensus
BILL Holdings, Inc. price-consensus-chart | BILL Holdings, Inc. Quote
BILL added a total of 11,300 net new customers in fourth-quarter fiscal 2024, with 4,600 customers from its direct and accounting channels and 6,700 from financial institutions. The retention rate for BILL standalone customers was 83%, demonstrating strong customer loyalty.
Nevertheless, investors should ask this question — will expanding clientele make BILL shares a good investment? Let's analyze.
Will BILL's Strong Portfolio Aid Prospect?
BILL is solidifying its position in the financial technology landscape with a growing portfolio and strong momentum across its Spend & Expense solution.
In fourth-quarter fiscal 2024, BILL upgraded its payment engine and platform, revamped its mobile app and added local transfer options for international payments and FedNow support for instant transfers. This shows BILL's dedication to enhancing its financial solutions.
In the same quarter, its solutions were utilized by 475,600 businesses and transacted $76 billion in total payment volume.
The Spend and Expense solution (formerly known as Divvy) saw revenue growth of 26%, driven by a 28% increase in card payment volume. This solution added 1,300 net new businesses in fourth-quarter fiscal 2024.
BILL's expanding SMB clientele with the likes of Adyen ADYEY, Regions Financial RF and Xero has been a key catalyst.
In June, the company partnered with Regions Bank to launch Regions CashFlowIQSM, a digital solution designed to streamline payments and enhance cash-management processes for commercial clients.
BILL's partnership with Adyen integrates advanced acquiring and issuing capabilities into its financial operations platform for SMBs, enhancing accounts payable and receivable solutions with Adyen's technology.
BILL's Q1 Outlook Looks Dull
Bill Holdings' strong demand for its financial operations platform among SMBs is boosting top-line growth. However, a challenging macroeconomic environment, persistent inflation and high interest rates are a major concern as SMBs tighten their spending budgets on digital initiatives.
For first-quarter fiscal 2025, BILL expects revenues to be between $346 million and $351 million, indicating growth of 13-15% year over year. The Zacks Consensus Estimate is pegged at $348.07 million, suggesting a rise of 14.13% year over year.
Non-GAAP earnings per share are expected to be between 48 cents and 51 cents. The consensus mark for earnings declined 5.7% in the past 30 days to 49 cents.
BILL Stock – Buy, Sell or Hold?
BILL stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.
The forward 12-month Price/Sales ratio for BILL stands at 4.32X, higher than its Zacks Internet - Software sector's 3.12X, reflecting a stretched valuation.
BILL Holdings currently carries Zacks Rank #3 (Hold) suggesting that it may be wise to wait for a more favorable entry point in the stock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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