BILL Holdings: Mizuho Downgrades to Neutral, PT to $43 from $50.

BILL Holdings: Mizuho Downgrades to Neutral, PT to $43 from $50.

Mizuho Financial Group has downgraded BILL Holdings (NYSE: BILL) to Neutral with a new price target of $43, down from $50. This change comes amidst mixed earnings reports and a challenging market environment. BILL Holdings reported $383.3 million in Q4 2025 revenue, a 12% year-over-year increase, driven by AI-powered fraud prevention and automated workflows boosting transaction fees [1].

Despite strong revenue growth, the company faced several challenges. Non-GAAP gross margins rose to 84.2%, but EPS fell 7% due to a 13.6% increase in sales and marketing costs, leading to a decline in free cash flow to $68.5 million [1]. The stock's valuation at 111.5x P/E, significantly higher than the peer average of 25.2x, has raised concerns about overvaluation [1].

Mizuho's downgrade reflects the analyst's caution about the company's ability to stabilize net retention rates and execute its AI roadmap, which are key to long-term success. The stock currently trades at a 30.5% discount to its estimated fair value of $60.19 [1]. This discount might present an opportunity for investors willing to bet on BILL's AI-driven differentiation and ecosystem expansion.

References:
[1] https://www.ainvest.com/news/bill-holdings-navigating-margin-pressures-strong-revenue-growth-ai-driven-innovation-2508/