Bill.com Stock Analysis In 5 Minutes

TL;DR

build.com is a software company helping small businesses with financial solutions, with impressive growth but uncertainty in profitability.

Transcript

does build.com deserve a spot in your  portfolio let's run through the bull   and the bear case in about five minutes my name  is Brian Feroldi and my name is Brian Stoffel   for those that have never heard of bill.com  before what does this company do so this is a   software-as-a-service company that's focused on  helping solve the back-office fin... Read More

Key Insights

• 👨‍💼 build.com provides essential financial solutions for small businesses, including accounts payable, receivable, spend management, and payments.
• 🤱 The company earns revenue through subscription fees and transaction fees, showcasing a diverse revenue stream.
• ⚾ Impressive customer base of over 126,000 and network members of 3.2 million highlight the company's scale and potential for growth.
• ⚾ The reliance on transaction-based revenue poses both opportunities and risks for build.com's financial performance.
• 🖤 Investor concerns include the lack of profitability, limited revenue diversification, and a potentially risky partnership with Intuit.
• ☠️ build.com's high net dollar retention rate and positive customer feedback indicate a strong user base and potential for sustained growth.
• 🥺 The executive team being founder-led and having high ownership is seen as a positive aspect for the company's operations.

Questions & Answers

Q: How does build.com earn revenue?

build.com generates revenue through subscription fees from customers and transaction fees on payments, accounting for 30% and 70% of total revenue respectively.

Q: What are the strengths of build.com as an investment?

build.com has a strong user base with impressive growth, a high net dollar retention rate, and a founder-led executive team. It offers solutions for a vast market of small and medium-sized businesses.

Q: What are the weaknesses of build.com for investors to consider?

build.com lacks profitability and free cash flow, has limited revenue streams beyond its current offerings, and has a dependent relationship with Intuit that poses a risk to its business.

Q: How can build.com improve as an investment opportunity?

build.com should focus on improving profitability, maintaining its high retention rate, and strengthening its balance sheet by reducing debt and increasing cash reserves.

Summary & Key Takeaways

• build.com is a software-as-a-service company assisting small businesses with financial challenges like accounts payable and receivable, spend management, and payments.

• The company generates revenue through subscription and transaction fees, with a large customer base and high retention rate.

• While build.com shows growth potential, investors are cautious due to lack of profits, limited revenue streams, and a potentially risky reliance on Intuit.