On Thursday, Wolfe Research downgraded shares of Bill.com Holdings Inc. (NYSE: NYSE:BILL), changing the rating from Outperform to Peer Perform. The firm cited concerns about the company's ability to maintain sustainable growth over the medium term. Wolfe Research adjusted their valuation of Bill.com, applying a multiple of approximately 3x-4x to the expected CY26 gross profit.
The revised price target range for Bill.com is now set between $46 and $56. This new target reflects a slight discount compared to AVDX, which Wolfe Research uses as a benchmark. The downgrade comes with a reassessment of the company's future gross profit growth, with estimates for CY25 and CY26 at 12.7% and 15.8%, respectively.
Wolfe Research's valuation also implies that Bill.com is trading at approximately 14 times its adjusted EBITDA, which translates to over 50 times the EBITDA estimates when stock-based compensation (SBC) expenses are included. The analyst's comments indicate a reduced confidence in the key drivers that are essential for Bill.com's sustainable growth in the medium term.
In other recent news, Bill.com has experienced a series of analyst adjustments. Wolfe Research downgraded the company's shares from Outperform to Peer Perform, citing concerns about sustainable growth, and revised the price target range between $46 and $56. Meanwhile, Needham maintained a Buy rating on Bill.com with a $100 price target, highlighting the company's potential to increase its take rates and innovate using artificial intelligence.
Oppenheimer decreased its price target for Bill.com to $70 due to market uncertainties, yet maintained an Outperform rating. Baird adjusted its price target for Bill.com to $68, expecting the company to surpass Q4 revenue and EBITDA expectations.
In other developments, Bill.com initiated a repurchase of approximately $235 million worth of its convertible notes due in 2025, reducing the remaining notes set to mature in December 2025 to $172 million.
The company also appointed Sarah Acton as Chief Customer Officer, aiming to enhance engagement with small and midsize businesses. These recent developments provide investors with an insight into the evolving financial landscape of Bill.com.
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