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On Friday, BMO Capital Markets adjusted their outlook on Bill.com Holdings Inc. (NYSE: NYSE:BILL) shares, increasing the price target to $52.00, up from the previous $47.00. The firm maintained its Market Perform rating on the company’s stock. According to InvestingPro data, the stock has experienced a significant decline of over 38% in the past six months, though current analysis suggests the stock may be undervalued based on its Fair Value metrics.
Daniel Jester, an analyst at BMO Capital, provided insights into the revision. He indicated that while fiscal year 2025 was a period of significant investment within Bill.com, aiming to propel core growth back to around 20% year-over-year, there are concerns about a slower-than-expected recovery going into fiscal year 2026. This is due to a combination of moderating customer spending and monetization trends observed in the third quarter of fiscal year 2025. Despite these challenges, InvestingPro data shows the company maintains impressive gross profit margins of 84.5% and a healthy current ratio of 1.69.
BMO Capital has revised its estimates for Bill.com, adopting a more cautious stance on most of the key metrics for the company. This change in estimates takes into account the potential headwinds from the macroeconomic environment. However, the firm also recognizes possible positive drivers for Bill.com, including pricing actions and new product offerings like enhanced ACH transactions, which could serve as catalysts for growth.
The analyst also noted an anticipated improvement in free cash flow (FCF) generation for Bill.com as an incremental positive factor. This expectation of higher FCF contributes to the rationale behind the increased price target. InvestingPro data reveals the company has generated substantial free cash flow of $311.75 million in the last twelve months, with additional financial insights available through InvestingPro’s comprehensive research reports.
Investors and stakeholders can expect to see how these factors play out when Bill.com announces its year-end results in August. The updated price target reflects BMO Capital’s assessment of the macroeconomic trends that could influence the company’s performance in the near term.
In other recent news, Bill.com reported its financial results for the third quarter of 2025, surpassing expectations with an earnings per share (EPS) of $0.50, well above the forecasted $0.37. The company achieved a total revenue of $358 million, slightly above the anticipated $356.65 million, marking an 11% year-over-year increase. Despite the positive earnings report, Evercore ISI adjusted its price target for Bill.com, reducing it to $50 from $65, while maintaining an In Line rating. This adjustment reflects the company’s cautious fourth-quarter guidance and the impact of broader economic conditions on its small and medium-sized business (SMB) customer base.
Bill.com’s management noted that SMBs are adapting to a changing macroeconomic landscape, with trends pointing to more conservative spending patterns and fewer transactions. For the upcoming fourth quarter of 2025, Bill.com anticipates total revenue between $370.5 million and $380.5 million, with core revenue expected to grow by 11-15%. The company projects a non-GAAP operating income of $43-$48 million for the quarter. Analysts from Evercore ISI expressed skepticism about the company’s visibility into its operations, given the observed softness in the SMB sector, and highlighted potential challenges in scaling new product offerings.
Additionally, Bill.com has been focusing on expanding its product offerings and enhancing its core services, including the launch of advanced solutions for larger businesses and improvements in international payment capabilities. Despite these efforts, the firm’s report noted that customers might be favoring lower-value payment methods like checks and ACH transfers over higher take-rate options. Bill.com remains optimistic about its long-term opportunities, but current economic and political uncertainties may constrain the stock’s performance, according to Evercore ISI.
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