Bill.com BILL shares soared 18.3% in the last trading session to close at $154.23. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.4% loss over the past four weeks.
The upswing came after Bill.com reported stronger-than-expected third-quarter fiscal 2021 results and said it would acquire expense management software provider Divvy.
The company came out with a non-GAAP quarterly loss of 2 cents per share versus the Zacks Consensus Estimate of a loss of 8 cents. This compares to loss of 4 cents per share a year ago. Moreover, third-quarter revenues increased 45% year-over-year to $59.7 million and surpassed the Zacks Consensus Estimate of $54.2 million.
Separately, Bill.com announced entering a definitive agreement to acquire Divvy in a cash and stock deal worth approximately $2.5 billion. Per the terms of the transaction, the company will pay about $625 million in cash and the remaining $1.875 billion in stocks.
Price and Consensus
This payment processing software company is expected to post quarterly loss of $0.07 per share in its upcoming report, which represents a year-over-year change of -250%. Revenues are expected to be $55.99 million, up 33% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Bill.com, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on BILL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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Bill.com Holdings, Inc. (BILL) : Free Stock Analysis Report
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