Loss-Making Bill.com Holdings, Inc. (NYSE:BILL) Expected To Breakeven In The Medium-Term

By
Simply Wall St
Published
August 02, 2021
NYSE:BILL
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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. The US$19b market-cap company posted a loss in its most recent financial year of US$31m and a latest trailing-twelve-month loss of US$66m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Bill.com Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Bill.com Holdings

Consensus from 4 of the American Software analysts is that Bill.com Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$33m in 2024. The company is therefore projected to breakeven around 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 44% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NYSE:BILL Earnings Per Share Growth August 2nd 2021

Underlying developments driving Bill.com Holdings' growth isn’t the focus of this broad overview, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Bill.com Holdings is its debt-to-equity ratio of 103%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Bill.com Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bill.com Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

  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.

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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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.