KeyBanc Capital Markets has revised its outlook on Bill Holdings stock following the release of the company’s latest earnings results.
Disappointing Financial Outlook
On Thursday, Bill (ticker: BILL) reported its numbers for its fiscal first quarter and provided a disappointing financial outlook. The software company anticipates revenue for its December quarter to be in the range of $293 million to $303 million, with earnings per share (EPS) projected to be between 35 cents and 44 cents. This falls short of the consensus estimates on Wall Street, which had forecasted revenue of $319 million and EPS of 48 cents.
Bill CFO John Rettig acknowledged the challenges posed by the current economic environment in a news release disclosing the results.
Analyst Downgrades Bill Stock Rating
In response to the news, analyst Alex Markgraff has downgraded his rating on Bill stock from Overweight to Sector Weight. He believes that macro headwinds and sentiment will continue to pose challenges for the near-term performance of the company’s shares. In a note titled ‘Souring Macro Leads to Lower Guide,’ Markgraff expressed the view that while Bill.com is a long-term category winner, there are currently limited catalysts for the stock.
Decreased Customer Spending and Shifting Payment Methods
One key factor impacting Bill’s performance is the more difficult economic environment, which is expected to prompt customers to reduce their spending on the company’s services. Additionally, the platform itself may become more conservative in extending credit, resulting in a decrease in a significant source of profits.
Furthermore, Bill has observed that its larger customers have started migrating towards cheaper payment methods, sacrificing its faster service in the process.
As a result of these factors, Bill shares experienced a significant decline of 32% to $61.22 during morning trading on Friday.
Bill’s Platform and Services
Bill’s platform offers companies the ability to streamline their financial management processes, facilitate bill payments, and expedite the collection of payments.
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