BILL Stock To $64?

BILL (BILL) stock has jumped 37% during the past day, and is currently trading at $48.94. Our multi-factor assessment suggests that it may be time to buy more shares of BILL stock. We have, overall, a positive view of the stock, and a price of $64 may not be out of reach. We believe there is a near-equal mix of good and bad in BILL stock given its overall Moderate operating performance and financial condition. Considering stock’s Low valuation we think it is Attractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $4.9 Bil in market cap, BILL provides cloud-based software that simplifies, digitizes, and automates back-office financial operations for small to midsize businesses, accounting firms, and financial institutions globally.

[1] Valuation Looks Low

This table highlights how BILL is valued vs broader market. For more details see: BILL Valuation Ratios

[2] Growth Is Very Strong

• BILL has seen its top line grow at an average rate of 22.4% over the last 3 years
• Its revenues have grown 12% from $1.4 Bil to $1.6 Bil in the last 12 months
• Also, its quarterly revenues grew 14.4% to $415 Mil in the most recent quarter from $363 Mil a year ago.

This table highlights how BILL is growing vs broader market. For more details see: BILL Revenue Comparison

[3] Profitability Appears Very Weak

• BILL last 12 month operating income was $-81 Mil representing operating margin of -5.2%
• With cash flow margin of 24.8%, it generated nearly $386 Mil in operating cash flow over this period
• For the same period, BILL generated nearly $-24 Mil in net income, suggesting net margin of about -1.6%

This table highlights how BILL profitability vs broader market. For more details see: BILL Operating Income Comparison

[4] Financial Stability Looks Strong

• BILL Debt was $1.9 Bil at the end of the most recent quarter, while its current Market Cap is $4.9 Bil. This implies Debt-to-Equity Ratio of 38.1%
• BILL Cash (including cash equivalents) makes up $2.2 Bil of $10 Bil in total Assets. This yields a Cash-to-Assets Ratio of 22.1%

[5] Downturn Resilience Is Weak

BILL has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• BILL stock fell 83.6% from a high of $342.26 on 9 November 2021 to $56.02 on 9 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $97.41 on 8 December 2024 , and currently trades at $48.94

 
2020 Covid Pandemic

• BILL stock fell 53.6% from a high of $62.94 on 12 February 2020 to $29.21 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 6 May 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read BILL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.