BILL
Bill.com Holdings, Inc.
$36.14
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 70.9% below fair value
You pay
$36.14
Bear
$57.11
Fair
$124.31
Bull
$195.99
Bear
$57.11
+58.0%
17% rev growth, 21% terminal margin
Fair
$124.31
+244.0%
28% rev growth, 28% terminal margin
Bull
$195.99
+442.3%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (28%) × margin expansion to 28%
Terminal Value % of EV
60%
Implied Market Multiple
2.1x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $54.90 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $124.31 per share.
Warnings
Gross margin of 81% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $54.90 (from 32 analysts). Our estimate is 181% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep