What happened

Shares of Bill.com (NYSE:BILL) climbed 72.2% in April, according to data from S&P Global Market Intelligence. After sliding 39.8% in March, the stock posted huge gains thanks to a confluence of factors last month.

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Tailwinds in the digital payments space and favorable analyst coverage helped Bill.com stock bounce back after March's coronavirus-driven sell-off. These catalysts, combined with momentum for the broader market, pushed the company's share price to the neighborhood of new all-time highs last month -- and a blockbuster earnings report in May then helped the stock hit a new record.

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So what

Tailwinds emerged for Bill.com last month as many e-commerce companies reported substantial engagement increases. Momentum for online retail suggested a better growth environment for Bill.com's payment-processing services, and the stock also appears to have benefited from encouraging coverage from analysts as well.

Jefferies analyst Samad Samana's note at the beginning of April stated that his conversation with Bill.com CFO John Rettig indicated that the business had not seen any notable increase in customer churn amid conditions created by the novel coronavirus. Wells Fargo analyst Timothy Willi published a note on April 22, initiating coverage on Bill.com and giving the stock an "equal weight" rating. Willi set a $48 52-week price target on the stock, that suggested roughly 6.7% upside at the time of publication.



Now what

Bill.com stock has posted big gains in May's trading. The fintech company's share price is up roughly 37% this month.

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Bill.com published third-quarter earnings on May 7, with revenue for the period climbing 46% year over year to reach $41.2 million, and subscription-and-transaction revenue rising 63% year over year to reach $36.1 million. The company's non-GAAP (adjusted) loss per share for the period came in at $0.04. Results for the quarter were significantly better than the average analyst targets, which had called for revenue of $36.8 million and an adjusted loss of $0.10 per share.

Rettig noted that the company did start to experience increased attrition from existing customers in April. However, Bill.com's 82% customer retention rate through the year ending in April still matched its retention rate from fiscal 2019, and the business is doing a great job adding new customers. The company guided for revenue between $37.4 million and $38.4 million in the fourth quarter and an adjusted loss per share between $0.11 and $0.12.