As you might know, Bill.com Holdings, Inc. (NYSE:BILL) just kicked off its latest quarterly results with some very strong numbers. Bill.com Holdings outperformed on both revenues and the expected loss per share, with revenues of US$41m beating estimates by 11%. Statutory losses were US$0.11, 33% smaller thanthe analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the nine analysts covering Bill.com Holdings are now predicting revenues of US$179.1m in 2021. If met, this would reflect a sizeable 22% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 28% to US$0.68. Before this latest report, the consensus had been expecting revenues of US$169.8m and US$0.59 per share in losses. While next year's revenue estimates increased, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target rose 44% to US$73.25, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Bill.com Holdings analyst has a price target of US$90.00 per share, while the most pessimistic values it at US$55.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Bill.com Holdings' revenue growth will slow down substantially, with revenues next year expected to grow 22%, compared to a historical growth rate of 51% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% next year. Even after the forecast slowdown in growth, it seems obvious that Bill.com Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. We have estimates - from multiple Bill.com Holdings analysts - going out to 2022, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Bill.com Holdings (1 is significant!) that you need to be mindful of.
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