Core Insights - The earnings season for the quarter ending September has started strong, with 79% of S&P 500 companies beating expectations [1] - Duolingo and Bill.com are highlighted as companies with a track record of consistently exceeding their forecasts, with upcoming earnings reports on November 6 and November 7 respectively [1] Duolingo - Duolingo is the largest digital language education platform globally, boasting 103.6 million monthly active users (MAU) as of Q2 2024, a 40% increase year-over-year [2] - The company generated $178.3 million in revenue during Q2 2024, reflecting a 41% growth and surpassing its guidance range, leading to an increased full-year revenue forecast of $738.3 million [2] - A new AI-powered subscription, Duolingo Max, is expected to enhance revenue growth, with features like personalized feedback and AI chatbot interactions [3] - Q3 revenue expectations are between $186.7 million and $189.7 million, with significant profitability growth of 554% year-over-year in Q2 [4] - Duolingo's stock is trading at an all-time high with a price-to-sales (P/S) ratio of 20.9, above its historical average, but long-term growth could justify the valuation [4] Bill.com - Bill.com provides software solutions for small and mid-sized businesses (SMBs) to streamline financial workflows [5] - The company has consistently beaten revenue guidance throughout fiscal 2024 and is expected to continue this trend in Q1 fiscal 2025 [6] - Bill.com's flagship product is a cloud-based digital inbox for invoice management, which integrates with major accounting software [6] - The company serves 474,600 business customers, with a significant addressable market of over 70 million SMBs globally [7] - Bill.com generates revenue primarily through transaction fees, having processed over $1 trillion since 2018, against a global B2B payment volume of $125 trillion annually [8] - The stock is currently trading 83% below its all-time high, with a P/S ratio of 4.6, indicating a potentially attractive buying opportunity given its growth prospects [8]

Group 1 - Bert Hochfeld has a strong educational background with a degree in economics from the University of Pennsylvania and an MBA from Harvard [1] - Hochfeld has extensive experience in the tech industry, having worked for notable companies such as IBM, Raytheon Data Systems, and BMC Software [1] - He established Hochfeld Independent Research Group in 2001, providing research services to major institutions like Fidelity and SAC Capital [1] - The Hepplewhite Fund, operated by Hochfeld, was recognized as the best performing small-cap fund for the five years ending in 2011 by Hedge Fund Research [1] - Hochfeld has published over 500 articles on Seeking Alpha, focusing on information technology companies [1] - He ranks in the top 0.1% of Tip Ranks analysts for his successful selection of information technology stocks [1] Group 2 - In 2012, Hochfeld was convicted of misappropriating funds from the hedge fund he managed [1]

BILL Holdings (BILL) shares have plunged 33.9% on a year-to-date (YTD) basis, underperforming the Zacks Computer & Technology sector's return of 22%. BILL shares have also underperformed the Zacks Internet - Software industry and peers like Intuit (INTU) . Over the same time frame, INTU shares have lost 3.6%. The industry has appreciated 22% YTD. The underperformance can be attributed to challenging macroeconomic conditions, which hurt the spending power of small and mid-size businesses as they tightened th ...

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year. With a focus on tech and "the Great Energy Transition (including uranium)", Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outst ...

Sometimes, a discounted stock can present a valuable opportunity. The market has discounted a fair number of stocks over the last few years, and some for good reason. At the same time, share price alone tells you relatively little other than what the broader market seems to think the stock is worth at that given moment in time. A stock can easily be overvalued or undervalued, and it's important to understand the drivers behind the stock's performance before you decide whether it's a good fit for your portfo ...

Core Insights - BILL Holdings (BILL) shares have outperformed the Zacks Computer & Technology sector and its peer Intuit (INTU) over the past month, with a 5.7% increase compared to Intuit's 0.3% rise and a broader sector decline of 0.8% [1] Financial Performance - BILL registered a 16% year-over-year growth in revenues, with core revenues also rising 16% to $301 million, driven by customer acquisition and expanded payment offerings [2] - In the fourth quarter of fiscal 2024, BILL added 11,300 net new customers, with a retention rate of 83% for standalone customers, indicating strong customer loyalty [3] Product Development and Partnerships - BILL is enhancing its position in the financial technology landscape with a growing portfolio, including upgrades to its payment engine, mobile app, and new local transfer options for international payments [4] - The Spend and Expense solution saw a revenue growth of 26%, supported by a 28% increase in card payment volume, and added 1,300 net new businesses in the same quarter [5] - Partnerships with Regions Bank and Adyen are aimed at streamlining payments and enhancing cash-management processes for commercial clients [6] Future Outlook - For the first quarter of fiscal 2025, BILL expects revenues between $346 million and $351 million, indicating a year-over-year growth of 13-15% [8] - Non-GAAP earnings per share are projected to be between 48 cents and 51 cents, with the consensus mark for earnings declining 5.7% in the past 30 days to 49 cents [8] Valuation Concerns - BILL stock is considered to have a stretched valuation, with a forward 12-month Price/Sales ratio of 4.32X, higher than the sector's 3.12X, leading to a Zacks Rank of 3 (Hold) [9]

Summary of BILL Holdings (BILL) FY Conference Call - September 12, 2024 Company Overview - **Company**: BILL Holdings (BILL) - **Industry**: Payments Fintech Key Points and Arguments Economic Environment and Business Adaptation - The company has navigated significant changes in the economy over the past year, leading to lower B2B spending among small businesses [4][10] - BILL has launched product integrations and revised branding to adapt to cost sensitivity among suppliers, resulting in improved net additions in the second half of fiscal 2024 [4][5] - Confidence in future execution is supported by strong demand, a proven value proposition, and visibility into product volumes [6] Payment Volume Trends - Total Payment Volume (TPV) per customer has remained relatively flat, with expectations for mid-single-digit growth in a stable economy [8][9] - The company anticipates slightly higher growth than mid-single digits due to its strong market position and wallet share [9][12] - Small and medium-sized businesses (SMBs) are currently cautious due to high interest rates and labor costs, impacting their B2B spending [10][11] Product and Service Enhancements - BILL is focusing on acquiring larger businesses and expanding wallet share through products like international payments [12] - The company is working on automating payment processes to reduce costs for suppliers, which is seen as a key value proposition [23][30] - There is an ongoing effort to enhance the payment experience for suppliers, including the introduction of various payment methods [24][32] Financial Institution (FI) Channel - The transaction yield in the FI channel is currently low, primarily due to a skew towards lower-margin ACH and check payments [54][55] - The company is optimistic about expanding monetization in the FI channel as it introduces higher-yield products [55] Subscription and ARPU Trends - Subscription Average Revenue Per User (ARPU) growth has slowed due to an influx of smaller customers at lower price tiers [62][64] - The company plans to evolve its platform to include more modular pricing, which could enhance subscription ARPU over time [66] Cross-Sell Opportunities - There is strong interest from accounting firms in BILL's spend and expense management products, with efforts underway to enhance integration and user experience [70] Gross Margins and Payment Mix - Non-GAAP gross margins have declined, primarily due to a shift in payment mix towards lower-margin products like pay by card [71][74] - The company is migrating some AR volume to a new service provider, which will impact gross revenue recognition and margins [74] Future Outlook - The management expresses confidence in the long-term growth potential of the company, citing a significant market opportunity and a leadership position in the evolving payments landscape [79][80] - The company is focused on building a generational business with substantial room for growth in both payment and subscription monetization [80] Additional Important Insights - The company is exploring incentive plans to drive virtual card adoption among customers [75] - There is a recognition that suppliers may benefit from different bin rates, although this has not been widely implemented yet [77] - The management emphasizes the importance of understanding supplier needs and reducing process friction to enhance value [31][32] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting the company's adaptability, growth potential, and focus on enhancing supplier and customer experiences.

Bill.com has an enormous addressable market, and its stock looks like a great value right now. Enterprise software was one of the hottest segments of the technology sector in 2021. Capital was cheap thanks to record-low interest rates, and software companies were spending it on marketing and product development to generate surging revenue growth, even if it meant they lost money at the bottom line. But the era of cheap money is over, and most software companies now prioritize profitability. They are slashin ...

i Michael Vi It's often quite fascinating to see how quickly former market darlings can lose their status and become deep value plays, as is the base with BILL Holdings (NYSE:BILL). At its pandemic-era heights, Bill.com commanded revenue multiples north of 20x as its share price soared above $300. Today, however, small business churn and decelerating growth have eroded confidence in this name, which is one of the worst performers in the software sector with nearly a 40% year-to-date decline. The company fel ...

Jennifer Miranda Investment action I recommended a hold rating for Bill.com (NYSE:BILL) when I wrote about it in May, as I was not convinced that the business is turning around, despite the very early positive signs. Based on my current outlook and analysis, I recommend a hold rating. My key update to my thesis is that BILL's near-term outlook (both revenue and adj EBITDA margin) remains poor and uncertain. Until BILL shows evidence that its investments are working, with tangible improvement in various key ...