What happened

Shares of Bill.com (NYSE:BILL) were gaining last month, overcoming the coronavirus-driven sell-off in the market as the IPO stock posted a strong debut earnings report early in the month, and initially appeared to be resilient to COVID-19 fears.

According to data from S&P Global Market Intelligence, the stock finished the month up 13%. As you can see from the chart below, it jumped on its earnings report on Feb. 7, and remained volatile for the rest of the month.

^SPX Chart

^SPX data by YCharts.

So what

Shares of Bill.com, which provides cloud-based software to help small and medium-sized businesses with payments and back-office operations, climbed 15% on Feb. 7 after the company posted second-quarter earnings, its first report as a publicly traded company. Revenue in the quarter went up 50% to $39.1 million, trouncing expectations of $33.8 million, while total payment volume rose 41% to $24.8 million. Gross margin improved from 75.8% to 78%, and on the bottom line, it finished with an adjusted loss of $0.06 per share, ahead of estimates of an $0.08 per-share loss. Guidance was also much better than estimates, further encouraging investors.

A man holding a credit card with one hand and typing on a computer with the other.

Image source: Getty Images.

In the aftermath of the report, the stock continued to gain, adding as much as 15% to peak at $64.12, and then swung through the end of the month as it mostly withstood the coronavirus sell-off. Many cloud stocks, which seem to have less exposure to an outbreak than more cyclical or consumer-facing sectors, have outperformed the market during the coronavirus sell-off in spite of their high valuations.

Now what

Over the last two sessions, sentiment on Bill.com appears to have shifted as its stock has fallen more than 20% over the March 6 and March 9 sessions and is now lower than it was before the earnings report came out. However, there doesn't appear to be a direct reason for the sell-off.

Instead, investors may be reevaluating their earlier support of cloud stocks as concerns about the outbreak are worsening and the reality is settling in that this could be a severe economic shock. Though Bill.com may not have direct exposure to coronavirus-related concerns, many of its customers might, which could pose challenges for any growth stock, especially one counting on signing up new customers and expanding current relationships to grow its business.