Bradley Sills, an analyst from Bank of America Securities, reiterated the Buy rating on Bill.com Holdings. The associated price target is $60.00.
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Bradley Sills has given his Buy rating due to a combination of factors that highlight Bill.com Holdings’ stable growth trajectory and attractive valuation. Despite a slowdown in key growth metrics, the company’s core Bill AP/AR total payment volume growth remains consistent, suggesting a new normal in the current SMB spending environment. The company’s ability to cross-sell newer ad valorem services indicates potential for expanding its share of wallet, even though the move upmarket has slowed.
Furthermore, the company’s margin expansion and free cash flow conversion are expected to improve with more balanced growth. The shift in valuation methodology from EV/Sales to EV/FCF reflects the company’s maturity and sustained positive free cash flow over recent years. The price objective of $60 is based on a 19x CY26 FCF multiple, which is considered a discount compared to the broader SMID group, indicating an attractive entry point for investors.
In another report released today, Needham also maintained a Buy rating on the stock with a $75.00 price target.