1. BILL Holdings, Inc. (NYSE:BILL)
Number of Hedge Fund Holders: 64
BILL Holdings, Inc. (NYSE:BILL) is a financial technology company that provides cloud-based software for automating back-office financial operations for small and mid-sized businesses. Its platform streamlines processes such as accounts payable, accounts receivable, expense management, and payments. The company enables integration with major accounting software platforms, facilitating real-time visibility and improved cash flow management. BILL incorporates AI to automate data entry, detect errors, and optimize payment workflows, supporting greater efficiency and scalability in financial operations.
BILL Holdings, Inc. (NYSE:BILL) has demonstrated significant growth, having increased revenue by over 10x in the last 5 years and currently approaching $1.5 billion in revenue. The company has defined and leads the financial operations category, with approximately 0.5 million businesses on their platform and processes about 1% of US GDP. The company’s market opportunity remains substantial with over 6 million potential business customers in the US that have employees. BILL’s competitive advantages stem from its payment engine capabilities, processing transactions across 8 different payment modalities and 12 different payment rails with a fraud loss rate of less than 1 basis point. The company has demonstrated strong financial performance with free cash flow consistently around 20% and has grown ex-float operating income from 1% two years ago to 7% in the second quarter.
BILL Holdings, Inc. (NYSE:BILL) is making strategic investments of $45 million in fiscal year 2025 across four key areas: expanding payment solutions, improving large supplier experience, deepening relationships with accounting firms, and driving expansion in embedded solutions. The company is leveraging AI capabilities to enhance its platform, utilizing its extensive data set of millions of weekly documents and billions in weekly payment flows. Looking forward, management remains confident in achieving multiple years of 20% growth, driven by their massive market opportunity, cross-selling capabilities, and new payment product innovations.
Overall BILL Holdings, Inc. (NYSE:BILL) ranks first on our list of the 15 best small cap AI stocks to buy right now. While we acknowledge the potential of BILL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BILL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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