Gold prices just lower; monthly gains on track
Investing.com -- Piper Sandler downgraded Bill.com Holdings (NYSE: BILL) to Neutral from Overweight, cutting its price target to $50 from $70, after warning that monetization headwinds appear more severe than initially expected.
The move comes despite some positive trends in the company’s fiscal fourth quarter, where core revenue grew 15% year-on-year and total payment volume (TPV) rose 13% to $86 billion, beating consensus estimates.
The accounts payable/receivable (AP/AR) take rate reached 16.5 basis points, the highest of the year, supported by recent pricing changes.
However, management guided for fiscal 2026 core revenue growth of 12–15%, well below the earlier ambition of 20% and under consensus expectations of 15%.
Total revenue is forecast between $1.59 billion and $1.63 billion, representing 9–11% growth.
Bill.com also projected EBIT margins at 16% and earnings per share of $2.10, a 5% year-on-year decline due to lower non-operating income as interest rates are expected to fall.
“Monetization headwinds appear much greater than we anticipated,” analyst Clarke Jeffries wrote, citing limited AP/AR take rate expansion, pressure on spend and expense take-rates, and conservative assumptions on TPV per customer amid the macro environment.
He added that while the company has authorized a $300 million share repurchase plan—equivalent to nearly 90% of its projected fiscal 2026 free cash flow—it may not be enough to offset muted investor sentiment.
In fiscal 2025, Bill.com revenue exceeded initial guidance by only about 2%, raising doubts that new guidance is overly conservative.
“In short, monetization headwinds appear much greater than we anticipated,” Jeffries said.
“Investors will be looking to understand if guidance proves conservative, but given that FY25 revenue ultimately only outpaced initial guidance by about 2% we believe sentiment may remain muted for now.”
Piper Sandler now applies a lower five-year estimate and reduced its terminal free cash flow multiple to 14x from 18x, reflecting expectations of low- to mid-teens growth over the medium term.
Jeffries said that the bull case has “hit a substantial speed bump” and that an opportunistic re-rating appears unlikely in the near term.