BILL - BILL Holdings: A Great High-Beta Stock But Significant Macro Exposure
2024-02-15 07:44:27 ET
Summary
- Bill.com's investment proposition is less compelling in the current uncertain macro environment due to strong ties to SMB's economic impact.
- Bill.com addresses manual B2B payment processes, emphasizing digital advantages over traditional paper checks, such as time savings, reduced costs, improved security, and fraud mitigation.
- My reverse DCF model highlights the need for sustained top-line growth and improved profitability to justify current stock prices, with market expectations pegged at a ?20% growth rate.
- Key risks for Bill.com include sensitivity to SMB economic cycles, constant customer acquisition needs for maintaining NDR, intense competition in the SMB niche, and key person risk associated with CEO René Lacerte.