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Why Bill.com Stock Was Plunging Today

What happened Shares of Bill.com Holdings (NYSE: BILL) were taking a dive today as a high valuation and broader fears in the market overshadowed a solid earnings report in its fiscal third quarter. As of 10:26 a.m. ET, the stock was down 18.1%. So what Bill.com, which provides cloud software to help small and medium-sized businesses (SMBs) manage back-office accounting and payments, beat estimates on the top and bottom lines. Revenue jumped 179%, with the help of its acquisitions of Divvy and Invoice2Go, to $166.9 million, topping expectations at $157.9 million. Organic core revenue grew 74%, showing that the legacy business continues to grow briskly, especially as SMBs bounce back from the pandemic. Transaction fees jumped 286% to $113.3 million, and organic transaction fees doubled to $58.4 million, showing payment volume ramping up on the platform. Total payment volume on Bill.com increased 57% to $55.1 billion. On the bottom line, its adjusted loss per share expanded from $0.02 to $0.08, but that was better than estimates at a per-share loss of $0.16. CEO René Lacerte said: "We delivered a great quarter driven by robust demand for our solutions. We are executing against our strategy to drive organic momentum across our solutions while building a unified platform experience incorporating the strengths of Divvy and Invoice2go." Now what Guidance also topped expectations as the company forecast $182.3 million to $183.3 million in revenue in the fourth quarter, which was better than the consensus at $168.8 million. On the bottom line, it sees a per-share loss of $0.13 to $0.14, slightly ahead of estimates at $0.15. While the report itself left little to complain about, the headwinds against the software-as-a-service (SaaS) sector and high-growth, unprofitable stocks pushed the stock lower. The market seems to be saying that Bill.com stock was overvalued, and it still trades at a price-to-sales ratio around 20 even after today's sell-off. Still, the business itself looks strong and the stock was actually up 20% from its low point in the day by late morning, indicating some investors saw the sell-off as a buying opportunity. While it's impossible to know when the stock will bottom out, Bill.com's fundamentals are strong and it still looks like a long-term winner. 10 stocks we like better than Bill.com Holdings, Inc. When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Bill.com Holdings, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 7, 2022 Jeremy Bowman has positions in Bill.com Holdings, Inc. The Motley Fool has positions in and recommends Bill.com Holdings, Inc. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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