1 Growth Stock Down 85% to Buy Hand Over Fist, According to Wall Street

Core Insights - Bill Holdings is a cloud-based financial services company that has recently turned profitable and is considered a growth stock trading at a bargain price [1][9] - The company connects businesses to over 8 million financial institutions, facilitating seamless transactions and payments [3][4] - Bill Holdings primarily serves micro-sized to mid-market businesses, generating 72% of its revenue from transaction fees [4][5] Business Model and Growth Potential - The company offers an off-the-shelf cloud solution tailored for small businesses, filling a gap left by custom-built solutions for larger enterprises [5] - Management sees opportunities for expansion through new client acquisition, feature enhancements, increased engagement, and international growth [6] - Bill Holdings has a strong network effect, where increased membership attracts more institutions and allows for further investment in features [6] Financial Performance - In fiscal 2025, Bill Holdings reported a 13% increase in revenue and a 16% increase in core revenue, achieving a net income of $23.8 million compared to a net loss of $28.9 million the previous year [9] - The stock is currently trading at 21 times next year's earnings and less than four times last year's sales, indicating a reasonable valuation despite market pessimism [11] Market Sentiment and Analyst Recommendations - Out of 45 analysts, 35 recommend an outperform or buy rating for Bill Holdings, with an average target price about 5% higher than the current price of approximately $54 [13] - The company announced a $300 million share repurchase program, signaling management's confidence in the stock's value [14] - Activist hedge fund Starboard Value has taken an 8.5% stake in the company, aiming to influence board changes and enhance shareholder value [14][15]