Shares of BTRS Holdings Inc Have 100%+ Upside Potential

BTRS Holdings Inc (NASDAQ:BTRS), also known as Billtrust has, until recently, seen its share price trend steadily lower since it began trading publicly in January 2021.

BTRS stock going public during the worst pandemic in nearly a century—one that hobbled the global economy—certainly didn’t help, resulting in it closing out 2021 down by 51%.

You might think BTRS stock's sell-off was indicative of what was going on at the company, but that wasn’t the case. BTRS Holdings Inc actually had a solid financial performance in 2021.

In the fourth quarter of 2021, the company's revenue increased by 10.9% year-over-year to $42.9 million, gross profit increased by 18.5% year-over-year, and gross margin increased by 58.5% year-over-year. (Source: “Billtrust Reports Fourth Quarter and Full Year 2021 Financial Results,” Billtrust, March 1, 2022.)

BTRS Holdings Inc's full-year revenue increased by 14.2% to $166.4 million, with its software and payment revenue climbing by 28.0%. Its gross profit increased by 24.3% in 2021, while its gross margin expanded from 52.2% to 56.8%.

"We had an amazing quarter to finish the year with great execution across the business, as evidenced by our strong 25.1% year-over-year software and payments segment revenue growth in the fourth fiscal quarter—and 28.0% for full year 2021," said Flint Lane, BTRS Holdings Inc's founder and CEO. (Source: Ibid.)

Moreover, the company has provided solid guidance for full-year 2022.

As you can see in the chart below, BTRS stock rallied on the company's excellent 2021 results but gave up those gains in May, along with the broader stock market. At the same time, the S&P 500 fell into bear-market territory and the Nasdaq stayed in already-deep bear-market territory. Stock traders were worried that high inflation would weigh on economic growth.

Regardless, BTRS Holdings Inc continued to do what it does best, which resulted in another quarter of outstanding results. In the first quarter of 2022, the company's software and payment sales rose by 16.3% and its adjusted software and payment sales rose by 33.6%. (Source: “Billtrust Reports First Quarter 2022 Financial Results,” Billtrust, May 10, 2022.)

That momentum carried into the second quarter, with record software and payment revenue, record quarterly bookings, and a record number of new clients. This forced the company to increase its full-year 2022 guidance.

Investors and analysts finally got on board after BTRS Holdings Inc announced record second-quarter results in early August. As of this writing, BTRS stock is up by:

• 39% over the last month
• 43% over the last three months
• 28% over the last six months

Those are fabulous near-term gains, but BTRS stock is still down by five percent year-to-date and 30% year-over-year.

Wall Street expects shares of BTRS Holdings Inc to make up for lost time, with analysts currently offering an average 12-month share-price target of $8.67 and a high estimate of $10.00. This points to potential gains in the range of 16% to 34%.

Those projections might be a little light; analysts are, after all, notoriously conservative. A 12-month target range of $10.00 to $15.50 for BTRS stock isn’t out of reach, which points to gains of up to 108%.

Chart courtesy of StockCharts.com

About BTRS Stock

BTRS Holdings Inc is a business-to-business (B2B) accounts-receivable automation and payment company. It's a leading provider of cloud-based software and integrated payment processing solutions that simplify and automate B2B commerce. (Source: “Virtual Investor Session,” Billtrust, June 22, 2022.)

The company's Print segment primarily prints customer invoices and reduces the amount of time and costs associated with billing customers via mail.

The company's Software and Payments segment primarily uses software and cloud-based services for optimizing electronic invoice presentment, electronic payments, credit decisioning, collections automation, cash application and deduction management, and e-commerce for B2B customers.

BTRS Holdings Inc recently announced two strategic global acquisitions.

In October 2021, the company acquired iController, a Belgium-based provider of B2B collections management software, for $58.0 million.

In February 2022, BTRS Holdings Inc acquired Order2Cash, a European B2B financial software provider. Order2Cash has more than 700 customers and has established connections to more than 70 B2B and business-to-government (B2G) e-invoicing networks.

BTRS Holdings has also announced key partnerships with American Express Company (NYSE:AXP), Avalara Inc (NYSE:AVLR), Jaggaer, PepsiCo, Inc. (NASDAQ:PEP), and Repay Holdings Corp (NASDAQ:RPAY).

BTRS Holdings Inc Reports Record Q2 & Raises Full-Year Guidance

For the second quarter ended June 30, BTRS Holdings Inc announced that its total revenue increased by 22.5% year-over-year to $49.3 million, while its Software and Payments revenue increased by 35.4% to $33.3 million. (Source: “Billtrust Announces Record Second Quarter 2022 Financial Results,” Billtrust, August 9, 2022.)

BTRS Holdings Inc's gross profit, excluding depreciation and amortization, increased by 32.5% year-over-year to $29.5 million. Its gross margin, excluding depreciation and amortization, expanded by 451 basis points to 59.8%, from 55.3% in the same period of 2021.

BTRS Holdings Inc reported a second-quarter 2022 net loss of $15.2 million, or $0.09 per share, versus a second-quarter 2021 net loss of $10.7 million, or $0.07 per share.

"With a combination of 35.4% year-over-year software and payments segment revenue growth and our strongest bookings quarter ever, we are firing on all cylinders at this point,” said Lane.

For full-year 2022, BTRS Holdings Inc expects to report:

• Total revenue between $196.0 and $207.0 million, up from a prior guidance range of $195.0 to $207.0 million
• Net revenue between $166.0 and $171.0 million, which at the midpoint represents annual growth of about 28%, up from a prior guidance range of $165.0 to $171.0 million
• Software and Payments segment revenue between $134.0 and $139.0 million, which at the midpoint represents annual growth of about 31%, up from a prior guidance range of $133.0 to $139.0 million
• Adjusted gross profit between $122.5 and $126.5 million, which at the midpoint represents annual growth of 29%, up from a prior guidance range of $121.0 to $126.0 million

Analyst Take

As mentioned earlier, BTRS Holdings Inc is, in the words of its CEO, "firing on all cylinders." There aren’t many tech companies that can say that right now.

The outlook for the company is bright, with BTRS Holdings Inc expecting to achieve positive quarterly adjusted EBITDA by the second or third quarter of 2023 and positive full-year adjusted EBITDA in 2024. Additionally, the company expects to achieve positive free cash flow in 2023.

All this is wonderful news for BTRS stockholders.