JPMorgan says that while the tech sector is experiencing a lot of downsizing, Bill.com still has great potential for growth. Tientsin Huang began coverage with an overweight rating. She described Bill.com as a solid growth stock and one that has early-mover potential. BILL is a company that has created a platform for solving the old problem SMBs have with paying bills. We expect BILL to continue to expand rapidly. Huang stated that BILL is the fastest growing company in our coverage with a mid-term revenue growth rate of almost 50%. This makes it a worthy premium multiplier. Bill’s shares have dropped more than 60% from its peak in November and are now lower than most tech stocks. JPMorgan stated that while the company is still not making a profit but its purchase of Divvy lastyear has been proving to be a positive step towards strengthening its cash flow. “The majority of growth to date has been organic, but BILL recently started introducing the Divvy product to the installed base, unlocking significant earnings power – 1% penetration of Divvy into install base equates to as much as 7% revenue lift all else equal,” Huang wrote. JPMorgan established a $140 price target for shares, 22% higher than the closing stock on Thursday. — CNBC’s Michael Bloom contributed to this report.
