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Bill.com Holdings: Strong Growth And Abundant Potential

RiverPark Advisors an independently-owned investment firm, recently published its first-quarter RiverPark Long/Short Opportunity Fund commentary. During the first quarter of 2020, the RiverPark Long/Short Opportunity Fund returned 9.48% (institutional shares), compared to the total return of -19.60% by the S&P 500 Index. You should check out RiverPark’s top 5 stock picks which helped them beat the market by nearly 30 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, RiverPark Advisors highlighted a few stocks and Bill.Com Holdings Inc. (NYSE:BILL) is one of them. Bill.com is a leading provider of cloud-based software. Year-to-date, BILL stock gained 84.2% and on May 7th it had a closing price of $73.22. Its market cap is of $5.05 billion. Here is what RiverPark Advisors said:

“Bill.com is a leader in automation back office software for small and midsize businesses (SMB). The company creates seamless connections between its customers, their suppliers and their clients, so that customers can generate and process invoices, send and receive payments, and sync with each other’s accounting systems.

More than 90% of SMBs are still dependent on manual accounts payable and accounts receivable processes, including mailing invoices, printing checks, waiting for payments and storing paper. This $9 billion U.S. (and $30 billion global) market is underserved by existing financial software solutions and Bill.com, while an industry leader, still has only about 1% penetration, providing a long runway of growth. Despite its low penetration, Bill has unique scale in the market, having built a network of 1.8 million connected businesses, paving the way for new customers to implement and integrate more seamlessly.

For its most recent quarter, Bill.com reported 50% year-over-year revenue growth and even faster core subscription and transaction revenue growth of 61%, an acceleration from the previous quarter’s 57% growth. We believe that the company can grow revenue at greater than 30% per year for years to come. The company’s Non-GAAP gross margin of 78% increased 220 basis points year-over-year, and, as a SaaS software provider, Bill.com’s gross margin should continue to improve.”

In Q4 2019, the number of bullish hedge fund positions on BILL stock were 32 as compared to none in the previous quarter (see the chart here), so dozens of other hedge fund managers seem to agree with BILL’s huge upside potential.

Disclosure: None. This article is originally published at Insider Monkey.

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