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A Morgan Stanley analyst initiated research coverage on Bill.com (NYSE:BILL) at Overweight with a $220 per share price target.
The analyst sees BILL as an “underappreciated growth for category leader,” which could attract inflows as investors flee to quality.
“Strong secular tailwinds driving penetration into a nascent market opportunity which can potentially reach $80B, a defensible moat within an effective distribution strategy and a solid track record of execution outweigh risks of SMB exposure, as investors seek the highest quality software assets,” the analyst said in a client note.
The company is seen as “a trusted provider for SMBs looking to modernize antiquated paper-based AP / AR functions.” Moreover, the pullback in valuation offers an opportunity to gain exposure at “a material discount to high-growth peers.”
“A compelling value proposition, differentiated go-to-market strategy through direct sales, accounting partnerships, and financial institution partners, supporting a +65% revenue CAGR (CY21–CY23E), the second fastest in our coverage, and a solid track record of execution create a favorable risk/reward for BILL,” the analyst concluded.
BILL shares are trading over 2% higher on Monday.
