BILL Holdings Embraces Cost Control: Analyst Foresees Improved Profitability Following Workforce Reduction
Portfolio Pulse from Nabaparna Bhattacharya
Needham analyst Scott Berg reiterated a Buy rating on BILL Holdings, Inc (NYSE:BILL) with a $100 price target, following the company's announcement of a workforce reduction by ~15% and the closure of its Sydney office. The restructuring aims to focus on key priorities and improve profitability amid macro-related headwinds. The company expects to incur $29 million-$35 million in charges, with the majority in 2QF24. Berg sees a 300bps increase in FY24 operating margin to 13% and raises earnings estimates to $2.11 from $1.81. BILL's position in the electronic B2B payment space and high retention rates are seen as growth drivers.
December 06, 2023 | 7:09 pm
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POSITIVE IMPACT
BILL Holdings, Inc. is expected to see improved profitability following a workforce reduction and office closure, with a positive analyst outlook raising FY24 operating margin and earnings estimates.
The workforce reduction and office closure are significant cost-saving measures that are likely to improve BILL's profitability, as indicated by the analyst's raised operating margin and earnings estimates. This positive outlook, combined with the company's strategic position in the B2B payment space, could lead to increased investor confidence and a potential short-term rise in the stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100