Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>BILL Holdings shares significantly underperformed in 2024 with shares down ~37% year-to-date versus a 12% gain on the Nasdaq Composite Index.  </li>
<li>Shares saw sell-off post 3Q’FY24 earnings as results indicated a weak 4Q’FY24 guidance and customer churn while SMBs continue to be pressured by high inflation and interest rates.</li>
<li>My bear case implies a $31 valuation (vs. prior $25 PT), based on ~2x FY25E EV/Revenue and bear case FY25E revenue of $1368M, representing ~40% downside vs. current levels.</li>
</ul>


BILL Holdings shares significantly underperformed in 2024 with shares down ~37% year-to-date versus a 12% gain on the Nasdaq Composite Index.  
Shares saw sell-off post 3Q’FY24 earnings as results indicated a weak 4Q’FY24 guidance and customer churn while SMBs continue to be pressured by high inflation and interest rates.
My bear case implies a $31 valuation (vs. prior $25 PT), based on ~2x FY25E EV/Revenue and bear case FY25E revenue of $1368M, representing ~40% downside vs. current levels.


2024 High Conviction Update: BILL Holdings, End of the Share Repurchase Program and Customer Churn

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>In the Second Quarter Fiscal 2024 Earnings, Bill.com recorded robust profitable growth despite a challenging macro environment as small and medium-sized businesses (SMBs) continue to manage their spending cautiously.</li><li>The company reported year-over-year revenue growth of 22%, non-GAAP net income growth of 48%, and a non-GAAP net income margin of 23%.</li><li>It sees prospects for further growth once SMBs begin spending for expansion.</li></ul>

In the Second Quarter Fiscal 2024 Earnings, Bill.com recorded robust profitable growth despite a challenging macro environment as small and medium-sized businesses (SMBs) continue to manage their spending cautiously.The company reported year-over-year revenue growth of 22%, non-GAAP net income growth of 48%, and a non-GAAP net income margin of 23%.It sees prospects for further growth once SMBs begin spending for expansion.

Bill.com Holdings: Adopting A Broad Distribution Strategy Reaping Rewards?- Major Drivers

<ul><li>BILL Holdings, Inc. surpassed the revenue expectations as well as the earnings expectations of Wall Street, marking a milestone with Q1 revenue surpassing $300 million, a remarkable 33% YoY increase.</li><li>Despite surpassing expectations and witnessing strong customer adoption, the company faced growing macroeconomic pressures toward the end of the quarter, persisting into October.</li><li>In this report, we have carried out a fundamental analysis of the historical financial statements of the company.</li></ul>

BILL Holdings, Inc. surpassed the revenue expectations as well as the earnings expectations of Wall Street, marking a milestone with Q1 revenue surpassing $300 million, a remarkable 33% YoY increase.Despite surpassing expectations and witnessing strong customer adoption, the company faced growing macroeconomic pressures toward the end of the quarter, persisting into October.In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

BILL Holdings Inc.: Transforming Financial Operations in the Face of Macroeconomic Challenges! - Major Drivers

<ul>
<li>BILL Holdings is a cloud-based provider of SaaS, payments, spend and expense management products, which automate accounts payable (AP) and accounts receivable (AR) transactions</li>
<li>The company has successfully completed its IPO in 2019 and raised $200M+ in net proceeds. Today, BILL Holdings includes subsidiaries such as Bill.com, DivvyPay, Invoice2go, Cimrid and Finmark Financial.</li>
<li>My bear case assumes a ~5% ten-year revenue CAGR from FY24 through FY34, maximum competitive pressure, high customer churn, headwind to float revenue and volatile transactional revenue.</li>
</ul>


BILL Holdings is a cloud-based provider of SaaS, payments, spend and expense management products, which automate accounts payable (AP) and accounts receivable (AR) transactions
The company has successfully completed its IPO in 2019 and raised $200M+ in net proceeds. Today, BILL Holdings includes subsidiaries such as Bill.com, DivvyPay, Invoice2go, Cimrid and Finmark Financial.
My bear case assumes a ~5% ten-year revenue CAGR from FY24 through FY34, maximum competitive pressure, high customer churn, headwind to float revenue and volatile transactional revenue.


2024 High Conviction: BILL Holdings – Hyper Growth Through M&A Deals Is Over While SMBs Struggle

<ul><li>BILL Holdings Inc. managed to exceed analyst expectations in terms of revenue and earnings.</li><li>The company demonstrated robust growth in total revenue and core revenue, reflecting the success of its various services.</li><li>In the fourth quarter, BILL Holdings continued to exhibit impressive growth, reporting a significant increase in total revenue and attaining non-GAAP net income.</li></ul>

BILL Holdings Inc. managed to exceed analyst expectations in terms of revenue and earnings.The company demonstrated robust growth in total revenue and core revenue, reflecting the success of its various services.In the fourth quarter, BILL Holdings continued to exhibit impressive growth, reporting a significant increase in total revenue and attaining non-GAAP net income.

BILL Holdings Inc.: What Are The 3 Biggest Growth Drivers Of This Fintech Major? - Financial Forecasts

United States

BILL Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, offers cloud-based applications that simplifies, digitizes, and automates back-office financial processes for small and mid-sized businesses. BILL Holdings serves customers worldwide.

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BILL Holdings (BILL US)

Bill.com Holdings: Adopting A Broad Distribution Strategy Reaping Rewards?- Major Drivers

In the Second Quarter Fiscal 2024 Earnings, Bill.com recorded robust profitable growth despite a challenging macro environment as small and...

Baptista Research

BILL Holdings Inc.: Transforming Financial Operations in the Face of Macroeconomic Challenges! - Major Drivers

BILL Holdings, Inc. surpassed the revenue expectations as well as the earnings expectations of Wall Street, marking a milestone with Q1 revenue...

Baptista Research

2024 High Conviction: BILL Holdings – Hyper Growth Through M&A Deals Is Over While SMBs Struggle

BILL Holdings shares have underperformed the Nasdaq, with shares down ~40% over the year. My $25 PT is based on ~2x FY25 EV/Rev, the lower-end of...

Andrei Zakharov

BILL Holdings Inc.: What Are The 3 Biggest Growth Drivers Of This Fintech Major? - Financial Forecasts

BILL Holdings Inc. managed to exceed analyst expectations in terms of revenue and earnings. The company demonstrated robust growth in total...

Baptista Research

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2024 High Conviction Update: BILL Holdings, End of the Share Repurchase Program and Customer Churn

Shares of BILL Holdings significantly underperformed due to customer churn, bleak macro environment and continued growth slowdown in a core SMB...

Andrei Zakharov

Bill.com Holdings: Adopting A Broad Distribution Strategy Reaping Rewards?- Major Drivers

In the Second Quarter Fiscal 2024 Earnings, Bill.com recorded robust profitable growth despite a challenging macro environment as small and...

Baptista Research

BILL Holdings Inc.: Transforming Financial Operations in the Face of Macroeconomic Challenges! - Major Drivers

BILL Holdings, Inc. surpassed the revenue expectations as well as the earnings expectations of Wall Street, marking a milestone with Q1 revenue...

Baptista Research

2024 High Conviction: BILL Holdings – Hyper Growth Through M&A Deals Is Over While SMBs Struggle

BILL Holdings shares have underperformed the Nasdaq, with shares down ~40% over the year. My $25 PT is based on ~2x FY25 EV/Rev, the lower-end of...

Andrei Zakharov

BILL Holdings Inc.: What Are The 3 Biggest Growth Drivers Of This Fintech Major? - Financial Forecasts

BILL Holdings Inc. managed to exceed analyst expectations in terms of revenue and earnings. The company demonstrated robust growth in total...

Baptista Research