Is BILL a good stock to buy?We came across a bullish thesis on BILL Holdings, Inc. on TradersPro's Substack. Since the thesis was published on August 29th, BILL shares have edged lower as investors weighed its 9–12% FY27 revenue-growth outlook, keeping the recovery in check while its expanding AI capabilities remain a longer-term opportunity. In this article, we will summarize the bulls' thesis on BILL. BILL Holdings, Inc.'s share was trading at $48.02 as of October 28th 2026. BILL's forward P/E was 13.44 according to Yahoo Finance.
This isn't the first time we see a financial software company pitched as a great investment. Unfortunately, BILL shares lost 11.95% of their value year to date. Comparable stocks like Intuit lost 50.46% of their value during the same period. Why are financial software stocks declining so much and does BILL's recovery since May suggest investors are starting to see an opportunity?
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In May, we published an article about the 9 Best Low Priced Technology Stocks to Buy According to Hedge Funds and BILL ranked #7 in that article. BILL returned 19.84% since then, showing how a stock struggling for the year can still reward investors who buy during a pullback. So, hedge funds were right about BILL. This article explores how BILL is leaning on AI to power its next chapter. Before getting into our analysis, let's take a look at the business and why some investors like the stock so much.
BILL Holdings, Inc. (NYSE:BILL) makes software that helps small and midsize businesses handle everyday financial tasks like paying bills, sending invoices, and tracking expenses. Its fastest-growing opportunity is AI-powered financial automation, and that's central to understanding the stock. More businesses want to cut down on manual paperwork, and BILL Holdings, Inc. benefits as companies replace old-fashioned processes with a single digital system.
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Growth comes from three places: more payments flowing through its platform, more businesses using its spending and expense tools, and a push to win bigger customers. Investors are essentially betting that BILL Holdings, Inc. can extract more value from financial tasks companies are already doing.
The bullish case is simple: automation is becoming essential for finance teams, not just a nice-to-have. BILL Holdings, Inc. can grow by getting more transactions on its platform, getting more customers to use its full suite of tools, and rolling out AI features that handle approvals and reconciliation automatically. As businesses look to do more with smaller teams, bulls see years of growth ahead, especially if the company can get existing customers to spend more rather than just adding new ones.
Winning bigger customers is another growth lever. Larger companies have more complicated financial operations, which means more revenue potential per customer for BILL Holdings, Inc. The environment also favors this strategy right now, since businesses are prioritizing tools that cut costs over tools that just add features. That said, the company still needs to prove its AI tools can actually win over customers and hold up against competition from other payment and accounting platforms.
The investment case also hinges on interest rates. BILL Holdings, Inc. earns income on customer funds sitting on its platform, so when rates fall, that income shrinks. This makes it more important for the company to grow through transactions and new products rather than relying on interest income. Competition adds another layer of risk, since businesses have plenty of financial software options, and BILL Holdings, Inc. needs to keep proving its all-in-one platform beats using separate tools.
Another risk for the stock is that payment growth brings higher fraud and credit losses. BILL earns fees from moving money, but it also takes financial exposure when transactions fail or customers cannot repay. For certain payments, it sends funds before customer money is confirmed, and it purchases receivables generated through its card program. If fraud or customer defaults increase, BILL could incur losses even while transaction volume grows. Tightening payment approvals or credit limits could reduce those losses but also make its services less convenient. This creates a trade-off between expanding usage and protecting profitability. In our opinion, the growth story becomes less attractive if losses absorb a larger share of the revenue earned from processing payments.
Hedge fund positioning shows a mixed but fairly stable signal. As per our database, 48 hedge fund portfolios held BILL Holdings, Inc. at the end of the second quarter, down slightly from 49 in the previous quarter. This small dip suggests institutional investors are staying largely put on the stock rather than pulling back sharply, even as questions remain about its growth outlook. By comparison, Intuit (NASDAQ:INTU) was held by 98 hedge funds, up from 92, PayPal Holdings (NASDAQ:PYPL) was held by 60 hedge funds, down from 76, and Payoneer Global (NASDAQ:PAYO) was held by 40 hedge funds, up from 27. Payoneer Global stood out with the strongest increase in hedge fund interest, followed by Intuit, while PayPal Holdings saw a notable pullback, suggesting institutional enthusiasm was uneven across the group.
Short interest data also paints a fairly concerning picture for BILL Holdings, Inc. relative to its peers. About 17.43% of BILL Holdings, Inc.'s float is sold short, well above Intuit Inc. at 3.45%, PayPal Holdings, Inc. at 3.66%, and Payoneer Global Inc. at 5.48%. This suggests BILL Holdings, Inc. is drawing considerably more skepticism than all three peers as investors question whether its growth will translate into stronger profits, though strong results could prompt short sellers to buy back shares and help push the price higher.
Looking ahead, the stock's path depends on whether BILL Holdings, Inc. can turn its financial platform into steady, dependable growth despite investor doubts. The AI opportunity is real, but it needs to show up in actual results: more payment volume, more customer adoption, and better profitability ( see what is driving BILL's earnings growth faster than revenue ). Falling interest income, competition, and questions about growth remain the key risks to watch, and much depends on whether the company can grow beyond small businesses into a true financial operating system for companies of all sizes.
Valuation Analysis
BILL's EV/Revenue is 2.54x. Intuit Inc., PayPal Holdings, Inc., and Payoneer Global Inc. trade at EV/Revenue multiples of 4.15x, 1.44x, and 2.50x, respectively. BILL's own EV/Revenue was 3.38x on December 31, 2025, making its current multiple approximately 25% lower. We believe the current valuation reflects significant investor concerns about slowing growth, lower interest income, and competition in financial automation. However, the decline from its historical multiple offers a more measured valuation, rather than a clear discount across peers, given that BILL trades above PayPal and roughly alongside Payoneer. BILL's subscription and transaction revenue increased 16% to $1.50 billion in fiscal 2026, while adjusted operating income grew 35% to $323.7 million, although its reported operating loss of $73.4 million shows that sustainable profitability remains unproven. We believe BILL can justify its current valuation without accelerating beyond this growth rate if expanding platform usage delivers lasting profits after stock-based compensation. If BILL wins larger customers and successfully turns AI adoption into additional revenue and stronger margins, the current valuation could offer an attractive entry point despite the risks surrounding competition and declining interest income.
Previously, we covered a bullish thesis on PayPal Holdings, Inc. (PYPL) by Sergey in May 2025, which highlighted the payment transformation, margin expansion, AI-driven commerce and growth opportunities. PYPL's stock price has depreciated by approximately 14.73% since our coverage. We believe the current valuation could offer an attractive entry point if BILL converts platform growth and AI adoption into sustainable profits after stock-based compensation, despite competition and declining interest income.
BILL Holdings, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds . While BILL could offer long-term upside if larger customer wins and AI features drive recurring revenue and margin growth, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than BILL that operates as a critical AI tollboothand stands as the most important company in the world, check out our report about this must-own AI stock .
Disclosure: None.
