Bill (BILL 3.21%) stock is getting crushed in Friday's trading. The fintech specialist's share price was down 27.6% as of 12:45 p.m. ET, according to data from S&P Global Market Intelligence.
After the market closed Thursday, Bill posted quarterly sales and earnings results that beat the market's expectations -- but you would hardly guess that based on the stock's plunge on Friday. What's behind the big sell-off? Unfortunately, the company's guidance fell far short of Wall Street's targets.
Bill's quarterly beat is overshadowed by bearish guidance
For its fiscal 2024 first quarter, which ended Sept. 30, Bill reported non-GAAP (adjusted) earnings of $0.54 per share on sales of approximately $305 million. The average analyst estimate had been for earnings of $0.50 per share on sales of roughly $299 million. Bill increased sales by 33% year over year and adjusted earnings per share by roughly 286%. But the company is guiding for a dramatic growth deceleration in the current quarter.
For its fiscal 2024 second quarter, Bill expects sales of between $293 million and $303 million -- suggesting roughly 15.5% year-over-year growth at the midpoint of the target range. Meanwhile, adjusted net income is projected to be between $42 million and $52 million. For comparison, the business posted adjusted net income of $49.4 million in fiscal 2023's second quarter.
What comes next for Bill stock?
For the fiscal year, management is guiding for sales of between $1.205 billion and $1.245 billion -- which would amount to growth of roughly 16% at the midpoint. Adjusted net income for the year is estimated to be between $195 million and $235 million. Last fiscal year, the business posted adjusted net income of $194.4 million.
With its most recent targets, Bill is guiding for a dramatic slowdown in terms of sales and earnings growth. Yet the company still trades at a highly growth-dependent valuation even on the heels of the stock's big sell-offs.
BILL PE Ratio (Forward) data by YCharts.
Priced at roughly 33.5 times this year's expected earnings and 5.4 times expected sales, Bill's valuation still leaves the door open for further downside risk. If the company's sales and earnings growth pick back up, shares could see a significant recovery. But the near-term outlook is looking significantly less favorable following the fintech specialist's quarterly report.
