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Bill.com on a Tear, Fueled by Increased Transactions
Stock Analysis & Ideas

Bill.com on a Tear, Fueled by Increased Transactions

Shares of Bill.com (BILL) are on a tear, as an increased number of transactions and higher total payment volumes on its platform are leading to stellar growth in its financials. 

The cloud-based payments software provider processed 29.2 million transactions in FY21. Furthermore, the total payment volumes jumped 45% year-over-year to $140.3 billion. Owing to the strong demand for its platform, investors’ interest in Bill.com stock remains elevated. 

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Bill.com, with 6.3% of investors who hold portfolios on TipRanks having increased their exposure in the last 7 days.

Thanks to the solid buying, Bill.com stock increased about 175% in one year. Moreover, it has more than doubled in 2021. (See Bill.com Holdings stock charts on TipRanks)  

The rally in its stock, higher adoption of its platform, expansion of its e-payment offerings, acquisition of Divvy, and secular industry trends make me bullish on the stock.  

Highlighting the massive growth in transactions during the most recent quarter (read more: Bill.com Q4 Core Revenues Grow 100%; Shares Leap 16%) and upbeat outlook, Scott Berg of Needham reiterated a Buy rating on the stock. 

His outlook factors in a large TAM (total addressable market) of 6 million domestic SMB (small and midsize businesses) companies and a “secular tailwind that will push them to adopt 100% electronic payments over time from 25% or less today.”

Berg raised the price target to $280 (1.4% downside potential) from $215 on “stronger than expected customer acquisition and payment volume that appears to be durable over the near term.”

Thanks to the momentum in organic sales, the structural shift towards digital platforms, and a large addressable market, Bill.com expects to post revenues in the range of $476 million to $478 million for FY22. This compares favorably to Berg’s expectation of $425 million to $430 million. 

Looking ahead, Bill.com expects to capture a higher market share, acquire new customers and drive adoption of payment products by integrating its technology and go-to-market strategy with Divvy. Notably, Berg is “quite bullish” on “Divvy’s growth rate and gross margin profile.” 

Alongside Berg, most of the analysts have a bullish outlook on BILL stock. On TipRanks, Bill.com commands a Strong Buy consensus rating, based on 11 Buys and 1 Hold. The average Bill.com Holdings price target of $263 implies 7.4% downside potential to current levels. 

Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

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