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Bill.com Holdings, Inc. (NYSE:BILL) just released its latest quarterly results and things are looking bullish. Bill.com Holdings outperformed on both revenues and the expected loss per share, with revenues of US$46m beating estimates by 11%. Statutory losses were US$0.16, 27% smaller thanthe analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Bill.com Holdings' ten analysts are now forecasting revenues of US$193.1m in 2021. This would be a solid 15% improvement in sales compared to the last 12 months. Losses are forecast to balloon 39% to US$0.86 per share. Before this latest report, the consensus had been expecting revenues of US$185.8m and US$0.87 per share in losses.
There were no major changes to the US$115consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Bill.com Holdings at US$132 per share, while the most bearish prices it at US$96.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Bill.com Holdings' revenue growth is expected to slow, with forecast 15% increase next year well below the historical 39% growth over the last year. Compare this to the 414 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Bill.com Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Bill.com Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Bill.com Holdings going out to 2023, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Bill.com Holdings (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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