Shares of Bill Holdings (NYSE: BILL) were among the winners Monday. The software company that specializes in back-office accounting and payments for small and medium-sized businesses (SMBs) continued to gain following last Friday's pop on a better-than-expected earnings report. The stock seemed to benefit from a broader upward trend in fintech stocks today.
As a result, Bill finished up 11.1% on Monday.
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Bill is suddenly in rally mode
Bill, the owner of Bill.com, had been struggling for years with sluggish growth in the SMB and software market, but investors seem to expect that to change in the Trump era as financial stocks, including Bill, have soared since the election. Bill is up 45% over the last four sessions.
A strong first-quarter earnings report last Thursday also drove momentum in the stock as revenue rose 18% to $358.6 million, ahead of the consensus at $348.9 million, and adjusted earnings per share of $0.63 up from $0.44 in the quarter a year ago, which was also ahead of the consensus at $0.50.
Bill also raised its guidance for the fiscal year, calling for revenue of $1.439 billion to $1.464 billion and adjusted earnings per share (EPS) of $1.65 to $1.83, compared to the consensus at $1.55.
Wall Street analysts responded to the report with price target hikes, and payments stocks rose today in response to the rise in crypto prices and continued hopes for deregulation.
Small-cap stocks were also big winners today as the Russell 2000 jumped 1.5%. Investors continue to bet that Trump policies will favor small-cap stocks, which are more volatile than large caps. If that is the case, it should also help the small and medium-size businesses that make up Bill's customer base.
Can Bill keep gaining?
Bill was a big winner during the pandemic, though the stock has since given back much of those gains. However, the business is cyclical and should benefit if there is an economic boom over the coming years, which investors seem to be betting on.
It's still unclear if that will play out, but the recent earnings report is certainly a positive sign for the company.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bill Holdings. 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.
