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Investing.com - Needham maintained its Buy rating and $75.00 price target on Bill.com Holdings Inc. (NYSE:BILL) on Thursday, following Xero’s acquisition of payment vendor Melio. The company, currently valued at $4.6 billion, boasts impressive gross profit margins of 84.5% and maintains a strong balance sheet with more cash than debt.
Xero acquired bill payment vendor Melio for $2.5 billion on Wednesday, ending its embedded partnership with Bill.com. According to Needham, while the deal eliminates a solid long-term growth vector for Bill.com in the embedded space, it will have minimal near-term impact. The stock has faced pressure, declining nearly 50% over the past six months, though InvestingPro analysis suggests the company is currently undervalued.
The research firm noted that the acquisition highlights the value proposition of integrating accounts payable automation directly into accounting software, particularly after accounting platform vendors like Intuit (NASDAQ:INTU) have introduced payment functionality.
Needham believes the B2B payment market is best served through independent vendors not tied to accounting platforms. The firm stated that Bill.com would be "by far a superior asset" should accounting platforms need to upgrade their payment functionality.
The acquisition may put Bill.com in the spotlight as a potential acquisition target, according to Needham, which views the Xero-Melio deal as a "strong proof point" for the value of integrated payment solutions.
In other recent news, Bill.com Holdings Inc. has been the focus of several key developments. The company announced that Rohini Jain will take over as Chief Financial Officer, with John Rettig transitioning to President and Chief Operating Officer. This leadership change is part of a broader strategy to enhance growth and strengthen the company’s market position. In terms of financial outlook, BMO Capital Markets raised its price target for Bill.com shares to $52, citing potential growth catalysts such as new product offerings and improved free cash flow. However, BMO also expressed concerns about a slower-than-expected recovery into fiscal year 2026.
Meanwhile, Citi maintained its buy rating with a $67 price target following Xero’s acquisition of Melio, noting the strategic implications for Bill.com in the SMB B2B payments space. In contrast, Morgan Stanley (NYSE:MS) downgraded Bill.com from Overweight to Equalweight, lowering the price target to $55 due to reduced conviction in SMB spending trends and monetization strategies. Despite the downgrade, Morgan Stanley acknowledged a favorable long-term outlook for the company. Keefe, Bruyette & Woods also maintained their Market Perform rating, emphasizing the potential positive impact of the recent CFO appointment on the company’s strategic direction.
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