Bill Holdings (BILL) stock surged about 10% in Thursday’s after-hours trading session as activist investor Starboard Value disclosed an 8.5% stake in the financial automation software company. The activist investor revealed its stake in an SEC filing yesterday, stating that it plans to push for changes to create value for BILL shareholders.
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BILL stock has recovered 10% over the past month, but is still down 45% year-to-date.
Bill Holdings Could Face Pressure from Activist Starboard
In the SEC filing, Starboard stated that it believes that BILL stock was undervalued when it made the purchase and represented an attractive investment opportunity. The activist investor added that it intends to nominate a slate of “highly qualified” director candidates for election to Bill Holdings’ board at the 2025 annual meeting of shareholders.
Further, Starboard stated that it has already engaged, and expects to continue to engage in, discussions with management and the board regarding opportunities for value creation, board representation, and the composition of the board.
According to a Reuters report, Bill Holdings stated that it is confident about its ability to drive revenue growth and profitability, and create sustained value for shareholders. “Our conviction is underscored by the Company’s recently announced $300 million share repurchase program.” Bill Holdings also stated that it plans to have talks with Starboard to “understand their views as we do with other shareholders.”
Starboard often pushes for board changes to put pressure on target companies to streamline their business and drive shareholder value. The company recently disclosed a stake of over 9% in engineering materials company Rogers (ROG) and a holding of more than 9% in travel company TripAdvisor (TRIP).
Is BILL a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on Bill Holdings stock based on eight Buys and 10 Holds. The average BILL stock price target of $56.18 indicates 20.3% upside potential.
