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Bill.com Holdings, Inc. (NYSE:BILL): Are Analysts Optimistic?

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Bill.com Holdings, Inc. (NYSE:BILL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bill.com Holdings, Inc. provides cloud-based software that digitizes and automates back-office financial operations for small and midsize businesses worldwide. With the latest financial year loss of US$31m and a trailing-twelve-month loss of US$66m, the US$20b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Bill.com Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Bill.com Holdings

According to the 5 industry analysts covering Bill.com Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$33m in 2024. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 44%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Bill.com Holdings' upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Bill.com Holdings currently has a debt-to-equity ratio of 103%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Bill.com Holdings, so if you are interested in understanding the company at a deeper level, take a look at Bill.com Holdings' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. Valuation: What is Bill.com Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Bill.com Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bill.com Holdings’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.