A little over a year ago, Industry Focus host Jason Moser called out Bill.com (BILL 0.04%) as a fintech stock on his radar. Since that time, it has more than doubled. In this Fool Live video clip, recorded on Nov. 22, Moser and Fool.com contributor Matt Frankel discuss why Bill has performed so well and whether there could be more upside ahead.

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Jason Moser: Remember, Bill.com is a cloud-based software business. It digitizes and automates back-office financial operations, mostly for small and mid-sized businesses around the world. Shares are up better than 220%, so around 220% since the show, and I think a lot of that has to do ultimately, if we talk about insurance being such a massive market opportunity.

Obviously, fintech has offered all sorts of different ways to disrupt and make the system better. Bill.com, they say their vision is to be the all-in-one financial operations platform for small and medium-sized businesses. It's not a small vision, it's obviously very large vision they have, and I think they've made some acquisitions here along the way that are in line with that vision. They recently acquired Invoice2go, they also had the acquisition of Divvy as they continue to incorporate more services and products into their SaaS business. That's what they do, they run that SaaS business model where customers pay that monthly subscription fee.

They also benefit from the transactions that go through that platform. So you see some network effects that buildup here over time as they bring more businesses into the fold there and more customers accept those payments. That just gets easier and easier over time. Convenience obviously is a big selling point in this line of work. In like Lemonade, Bill.com's special sauce, they see it as their AI, their artificial intelligence-driven platform. Ultimately that is something that makes their network smarter, speedier, more reliable, reduces fraud.

Over time, ideally, you want to see those network effects continue to build that can result in some good switching costs, which can result in potentially some pricing power down the line there as well. But all in all, it really does feel like the business fundamentally continues to perform very well. I don't know that I would look at this as a value play though, Matt.

Matt Frankel: That's fair enough. I just looked this up as you were talking. At the time that we made these additional calls, Bill's market cap was roughly double what Lemonade's was. Today, Bill.com's market cap is roughly 10 times what Lemonade's market cap is.

Moser: Yeah. It's up there, man. I will tell you. I understand the enthusiasm, but when we were talking about these last year in what I was talking about what to watch, I mean, at the time, shares were trading, shares were valued at around 48 times sales. Now, it's a new business still working toward that profitability. But I think the reliable nature of the business model means the market is going to give them a little wiggle room to get there. But at that time I said that's really one of the bigger risks here, beyond just whether they can execute or not is you're paying a lot even in this environment where 30 times sales, essentially it's like the new P/E, 48 times sales stretch.

Now, if we look toward today, recently, they just set expectations for this coming year and they're calling for revenue in the range of $538 million to $541 million. If you look at where the business is today, the revenue they are calling for fiscal 2022, now you've got this stock valued more around 60 times full-year expectations. It hasn't gotten any cheaper but maybe this is a case of a winner that looks like it's poised to keep on winning.

Frankel: The margins are fantastic. I'll give it that. One thing I take issue with Bill is when they quote their market opportunity, I have to wonder just how exaggerated it is through the year. In the U.S., 6 million small and medium-sized businesses, 26 million sole proprietors, $25 trillion of business-to-business payment volume, technically all of that's correct. But think of it this way. I'm a sole proprietor technically, I would have no use for Bill's products.

Moser: Right.

Frankel: Every Uber driver, every DoorDash driver, every Instacart shopper, there are all sole proprietors and they would use these products.

Moser: Yeah.

Frankel: It's really tough to quantify. My point is there's a huge market opportunity here for sure. It's really tough to quantify how big it is.

Moser: I think that's a fair point. I think a lot of times it's worth remembering, too, for listeners. There's a difference between that total addressable market, that TAM and the serviceable addressable market, the SAM. There are two very different things and I understand businesses like to quote that TAM because it's typically the bigger number but you got to do a little bit of homework to really get to the crux of what the SAM is because that's really what matters. Then for a business like Bill.com, I would agree. I think it's even more crucial.

Frankel: Out of those 26 million sole proprietors, how many would actually have reason to use Bill.com's platform? I don't know the answer, maybe a lot. But the point is that I don't know.

Moser: Well, I think it's probably reasonable to look at that with a little bit of take it with a grain of salt. That's where you go in there. You start discounting some of those forecasts, some of those expectations in order to paint a picture that maybe accounts for more realistic picture.

Frankel: I'm not trying to talk negative just because this was your stock. If you look at some of these numbers, you know why it's done so well. The margins look fantastic, 83% gross margin. Lemonade, doesn't have an 83% gross margin, 124% revenue retention. That is just average customer that's fit with the business for over a year is spending 24% more than it was a year ago. They're obviously finding a ton of value in the product, 126,000 customers, that's a big customer base and keeps growing. Revenue was up 150% year-over-year, which is a bad comparison because of COVID. But a lot of people thought that the revenue was going to suffer long-term because of COVID. Because generally they are focused on businesses with like a brick-and-mortar presence. The business has performed phenomenally well, especially in comparison to where people thought it would be during the height of the COVID pandemic like in August when we made the calls.

Moser: I think that really has been a beneficiary of the move toward the digital economy. I mean, that really I think it's one of those businesses that has certainly benefited from that. There's been a lot of tailwinds. You mentioned that revenue growth, more impressively to me, even is the organic core revenue growth grew 78% so they've made some acquisitions along the way and that's something to keep in mind too. Businesses that make these acquisitions, those acquisitions come with risks and you've got to make sure they can incorporate those into the business seamlessly.

But generally speaking, it does feel like it's benefited from a lot of tailwinds. Surprised we haven't seen maybe some profit taking, some selling as we've seen with some of these other businesses that benefited so much over the last year and a half. As we've moved more digital. But maybe that just really speaks to the progress the business is making.

I think regardless, very competitive space, I mean, you've got companies like Square out there that help all sorts of physical businesses. Companies like Coupa Software generally focused on the same market. It's good to see Bill.com continuing to prosper there. They recently inked a neat relationship with Marqeta, which is an issuer for a card issuing for the modern day. That's a positive as well, but it's not a stock that's gotten any cheaper and as to would I'd buy this stock today, honestly, I do feel like this is one of those I would like to add to. I would feel comfortable adding to my position today because when I first bought the shares, I approached it with the idea that I'm going to start with a small position to see where this goes and if it's a business that continues to succeed, I would be more than happy to add to this winner.