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Why Stock Just Went Off Like a Rocket

By Rich Smith – Aug 27, 2021 at 10:28AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More is losing money hand over fist, but its revenue growth is something else.

What happened

A funny thing happened on the way to Holdings' (BILL -9.17%) fourth-quarter earnings report last night. The cloud-based payments software maker missed earnings, reporting a $0.07-per-share pro forma loss where Wall Street had expected only a $0.04 loss. It also warned of worse-than-expected losses in the fiscal first quarter of 2022 and fiscal 2022 as a whole.  

And then stock went up -- 21.5% already as of 10 a.m. EDT.

White rocket zooming up on a blue chart.

Image source: Getty Images.

So what

So what is an investor to make of this? Basically, investors are reading as a revenue story, not a profits story.  

That's good news for shareholders, because the profits story at is well and truly awful. You see, not only did lose $0.03 per share more than Wall Street had expected, pro forma. When calculated according to generally accepted accounting principles (GAAP),'s losses were actually much worse -- $0.48 per share lost in the fiscal fourth quarter of 2021 (more than three times as bad as Q1 2020), and $1.19 per share lost in all of fiscal 2021 (70% worse than last year).

On the plus side, though, doubled its core revenue in Q4, grew total revenue 86% to $78.3 million (Wall Street had expected $62.1 million), and grew sales for the year 51% to $238.3 million.

Now what

Yes, you read that right. While losses are staggering,'s revenue grew briskly, and indeed, its revenue growth accelerated in Q4. Probably even more attractive to investors, promised that revenue will continue accelerating in the new fiscal year.

Guidance now calls for sales to more than double in fiscal Q1 2022 to about $103.7 million, and to at least double year over year for the full year as well, hitting about $478 million in fiscal 2022.

Granted, losses will continue all year long. says it will lose $0.20 or $0.21 in Q1 alone, pro forma, and between $0.88 and $0.92 for the year. That didn't worry investors this quarter, however, and it seems they're not going to worry about it next year, either.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Holdings, Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned Stock Quote
$110.45 (-9.17%) $-11.15

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