On Wednesday, Baird adjusted its outlook on Bill.com Holdings Inc. (NYSE: NYSE:BILL) stock, raising the price target to $68 from the previous $60, while keeping a Neutral stance on the stock.
The firm anticipates that Bill.com will likely announce its fiscal fourth-quarter results in mid-August and suggests that the risk/reward leading into the earnings report is mildly positive, based on approximately 4 times the calendar year 2024 estimated revenue.
The firm expects Bill.com to report fourth-quarter revenue and EBITDA that will surpass Wall Street's expectations. However, the guidance for fiscal 2025 is projected to align closely with current market estimates. The analyst notes that investor interest in Bill.com is growing, as it is considered a leading B2B platform and is attractively valued in a market that is showing renewed interest in smaller-cap stocks.
Despite challenges in execution and remaining questions about small and medium-sized business dynamics, macroeconomic factors, competition from companies like Intuit (NASDAQ:INTU) and Bank of America (NYSE:BAC), stock compensation add-backs, and core margin growth, Bill.com's balance of growth prospects and valuation is seen to offer slightly more potential upside than downside.
Bill.com's positioning as a premier asset in the business-to-business (B2B) payment space is recognized, and its valuation is deemed reasonable in the context of the current market environment. The updated price target reflects a modestly optimistic view of the company's potential performance as it approaches its next earnings report.
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