Report by MYST Advisors
Transitioning from “great to good" - the stock is far too expensive trading at ~15x CY23 gross profit. BILL’s growth algorithm will decelerate from 50-100% down to 25-30% over the next few years. The company faces 3 primary issues: 1) Macro headwinds. 2) Competition - Intuit, the “Big Gorilla” in the space, is launching a competitive solution. 3) Negative mix shift - many investors are not taking the time to model out BILL’s business by channel, so they don’t understand the dilution to unit economics caused by adding more customers from the Financial Institutions channel. TP $62 (40% downside).