On Thursday, Goldman Sachs analyst Will Nance upgraded Bill.com Holdings Inc. (NYSE: NYSE:BILL) stock rating from Neutral to Buy and increased the price target to $104 from $96. The upgrade comes as InvestingPro data shows Bill.com maintaining impressive gross profit margins of 85.24% and achieving 18.54% year-over-year revenue growth. Nance cited several factors that have enhanced the visibility into the company's growth and profitability prospects. These factors include recent improvements in customer acquisition trends, total payment volume (TPV) trends, and take rate improvements.
Bill.com, which had previously seen a downgrade following its second-quarter 2024 earnings, announced a significant pull forward of investments into the fourth quarter of 2024 amid an uncertain macroeconomic environment. The company's first-quarter 2025 results, however, have shown a positive shift with a 2% year-over-year increase in TPV per customer. This growth is attributed to a moderating macro environment and the addition of new customers who tend to spend more than the average. According to InvestingPro's analysis, the company maintains a strong financial health score, with 12 additional exclusive ProTips available for subscribers.
The stability of the take rate seen in the quarter suggests that Bill.com is well-positioned to meet its second half of 2025 guidance. The company is expected to experience structural take rate expansion during this period. Goldman Sachs also noted an uptick in international payments following the rollout of local transfer capabilities, which contributes to the positive outlook.
Nance's analysis points to Bill.com's enhanced virtual card and cross-border capabilities, along with the scaling of invoice financing, as drivers for take rate improvements. These enhancements are expected to contribute to the company's revenue growth and ultimately, its profitability.
Looking ahead, the setup for Bill.com heading into calendar year 2025 is considered by Goldman Sachs to be one of the most attractive within their coverage. With a market capitalization of $8.54 billion and analysts expecting profitable growth, the company's strategic investments and improved metrics are seen as key indicators of its potential for re-acceleration in top-line trends and profitability. With these considerations, Goldman Sachs has expressed confidence in Bill.com's outlook, as reflected in the upgraded stock rating and increased price target.
For a comprehensive analysis of Bill.com's valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro, which provides in-depth insights for over 1,400 US stocks.
In other recent news, Bill.com has been the subject of several analyst reports. Susquehanna raised its price target on the company's stock to $100, citing the firm's optimistic long-term guidance and strong financial health. Bill.com has committed to achieving core revenue growth of over 20% in fiscal year 2026, building on its current revenue growth of 18.54%.
In addition, the company's inclusion in the S&P MidCap 400 index is a significant development, reflecting its recognition as a prominent player among mid-sized companies in the U.S. market. Baird and US Tiger Securities have maintained a Neutral and Buy rating on the stock, respectively.
Bill.com's Q3 results surpassed consensus expectations, with revenues reaching $358 million, indicating a 19% year-over-year core revenue increase. The company's management also revised its revenue growth forecast for fiscal year 2025, now expecting a 12-13% increase year-over-year.
As part of a strategic move, Bill.com repurchased 3.7 million shares worth $200 million as part of a $300 million authorization. The platform now serves over 475,000 businesses, handling $80 billion in payment volume.
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