Bill Holdings: A Dime’s Worth of Sense?

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Now, I reckon there’s a heap of folks on Wall Street who can spin a yarn about stocks, but precious few who’ve ever actually run a business. This here company, Bill Holdings, offers a service for the little feller—small and medium-sized businesses, they call ’em—helpin’ ’em manage their accounts. Seems simple enough, doesn’t it? But lately, these software stocks have been fallin’ faster than a politician’s promises, all ’cause of this newfangled “artificial intelligence” scare. Folks are worryin’ it’ll put folks outta work and make businesses build their own solutions. A curious notion, that.

I’ll tell ya what I don’t cotton to. These fears seem a mite misplaced when it comes to Bill. First off, most of their customers ain’t got a workforce big enough to need worryin’ about bein’ replaced by machines. And second, they ain’t sellin’ software licenses, they’re takin’ a cut of each transaction. It’s a bit like the tollbooth operator frettin’ about the invention of the railroad; a feller’s gotta eat, regardless of how the wagons roll.

Now, Bill’s stock has had a tumble, I’ll grant you that. Down 86% from its peak, it is. Looks like the exuberance of 2021 finally ran out of steam. But a bargain is a bargain, and by some measures, this stock is cheaper than a used mule. And the majority of them analysts over at the Wall Street Journal are sayin’ it’s time to buy, not sell. Let’s see if there’s any sense to that.

Bill Adds Significant Value for Its Customers

Small business owners, bless their hearts, are stretched thinner than a dime store fiddle string. They’re expected to be experts in everything from product knowledge to bookkeeping. Bill tries to buy ’em back a little time, see. They’ve built a cloud-based digital inbox where invoices arrive, savin’ folks from drownin’ in paper. Then, the platform routes each invoice to the right person for approval, and it can be paid with a single click. Simple, but effective, like a good hammer.

Bill also streamlines the accounts receivable process. They can rapidly generate invoices, or automatically create recurring ones. And they track incoming payments, makin’ sure the money arrives on time. They claim their customers get paid twice as fast, which, if true, is a powerful incentive. A feller appreciates prompt payment, don’t he?

Around 73% of Bill’s revenue comes from transaction fees – a nickel here, a dime there – whenever a business sends or receives a payment. Only 17% comes from software subscriptions, so they ain’t overly exposed if AI starts shrinkin’ workforces. It’s a sensible arrangement, like a farmer diversifyin’ his crops.

And Bill’s got a network of 9,500 accounting firms recommendin’ their products. That’s a powerful moat, that is. It makes the accountants’ jobs easier at tax time, and everyone benefits. A win-win, as they say.

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Revenue Growth is Slowing, Which is Worrying Investors

Back in 2021, Bill’s stock soared ’cause their revenue was climbin’ like a grapevine. It grew by 51% in 2021, then a whopping 169% in 2022. But they were spendin’ money hand over fist to fuel that growth, which meant they weren’t makin’ much profit. A feller can’t spend his way to riches forever, you know.

Now, Bill is bein’ more cautious with their spendin’ to deliver profitability. But that means slower growth. They generated $810.4 million in revenue in the first half of 2026, which was up a modest 12% year over year. It’s like tradin’ a racehorse for a sturdy plow horse; less speed, but more reliability.

On the plus side, after strippin’ out some fancy accountin’ tricks, Bill delivered an adjusted profit of $143.5 million. So, their new strategy appears to be workin’.

Investors don’t like it when a company slows down, though. Slower growth often means slower returns. But Bill’s business is more sustainable now, which should serve ’em well in the long run. A steady course is often the wisest one.

Wall Street is Bullish on Bill Stock

The Wall Street Journal tracks 24 analysts who cover Bill stock, and 15 of ’em give it a buy rating. The other nine recommend holdin’, so none recommend sellin’. They have an average price target of $57.73, which suggests the stock could climb by 25% over the next year. The Street-high target of $84 implies even greater upside.

I reckon both targets are realistic. Bill had 498,500 customers as of December 31st, which is a drop in the bucket compared to the estimated 72 million SMBs in their market. And those SMBs process $135 trillion in business-to-business payments each year. That’s a massive opportunity, that is.

After the 86% decline, Bill stock is now tradin’ at a price-to-sales ratio of just 3. That’s near the cheapest it’s been since it went public in 2019.

Therefore, while the current downtrend in Bill stock is powerful, its valuation is startin’ to look attractive. That could attract fresh buyers. The combination of the company’s steady growth and enormous market could make Bill a solid long-term investment, especially in light of Wall Street’s bullish sentiment. Now, whether Wall Street knows what it’s doin’ is another question entirely, but that’s a tale for another day.

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2026-02-25 05:14