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Investing.com -- Wolfe Research upgraded BILL Holdings to Outperform, saying the payments software provider could return to growth after a rough year that saw steep selloff in its shares this year.
“While BILL’s shares have underperformed YTD, down 37% vs. the S&P up 11%, we see potential for better prospects into FY26,” analyst wrote.
Brokerage lifted their price target to $70, implying 32% upside from Tuesday’s close.
The brokerage pointed to a mix of cost controls, new partnerships and progress in monetizing accounts payable and receivable services.
“We see 1) conservative guidance, 2) incremental Embed partnerships, 3) progress on AP/AR monetization, 4) sustainability in customer adds, and 5) activist (and PE) investor involvement with corresponding cost discipline, all potentially leading to a new trajectory for BILL with a better top-line and greater balance of growth and profitability,” Wolfe said.
The firm estimated that initiatives such as ad valorem offerings and Embed 2.0 partnerships could add 3% to 5% to core revenue estimates in fiscal 2026 and 2027.
Activist involvement is expected to push for tighter spending, with Wolfe noting that BILL ranks as the third-highest operating expense spender per employee in its coverage.
“Upside to FY2027 estimates” could reach nearly 30% on adjusted EBITDA if execution succeeds, the analysts said.
Wolfe also flagged “takeout optionality” as a potential catalyst, pointing to recent B2B payments acquisitions at far higher revenue multiples than BILL’s current valuation of about three times.
While short-term challenges around take rate expansion remain, Wolfe said it was “confident in BILL’s product suite, which is expected to deliver greater value relative to the cost of acceptance for suppliers.”
Features such as instant transfer and Pay by Card could continue to gain traction, the brokerage added.