Bill.com Holdings Inc. (BILL) PT Lowered to $60 at Evercore ISI
Evercore ISI analyst Peter Levine lowered the price target on Bill.com Holdings Inc. (NYSE: BILL) to $60.00 (from $70.00) while maintaining a In Line rating.
The analyst comments "BILL delivered solid F4Q results as revenue of $343.7mn (+16.1%) came in ahead of expectations of $328.9mn (+10.4%). Transaction revs grew 22.3% y/y, TPV was up 10% at 75.9bn, with 28mn transactions processed (+20% y/y). Mgmt’s macro commentary was very similar to last quarter, continuing to see signs of stabilization with transaction volume per customer remaining stable. Mgmt mentioned that they are not assuming any rapid rebound in the macro, nor any material deterioration in B2B spending among their core SMB customer base for FY25. The FY25 guide calls for 11% growth with core rev growth of 14.7%. Op. margins of 12.4% at the mid-point came in 300bps below consensus due to incremental growth investments of $45mn. These investments include enhancing and expanding solutions for v-cards, international payments, improving supplier experience, strengthening capabilities and relationships with accounting firms, and broader GTM investments to drive greater adoption of the suite. The highlight of the call was mgmt’s FY26 core rev growth target of 20%, driven by monitoring their newer growth investments, and a reacceleration of NRR in the 2H (assuming it troughs out in F2Q). We’ve finally received clarity on the BOA partnership, with mgmt amending the contract by an additional 3yr (4yrs in total). However, the downside is that this extension does not bring any incremental revenue. The contractual minimum is now spread over 4yrs, meaning that while the total value remains unchanged, the annual rev contribution is smaller. While it appears that BOA is still committed to doing it internally, they will license certain components of BILL’s tech. Bottom line: while the l/t opportunity ahead for BILL remains open-ended with payments, international expansion, and owning the financial back-office suite for SMBs, we remain on the sidelines and caution those to remain patient. Although we are encouraged by the incremental growth investments and mgmt's 20% growth target for FY26, we believe there is still uncertainty surrounding SMID-cap name with high SMB exposure. Reiterate in-line and $60 PT. "