Bottomline Technologies (EPAY) — Moves to Hold
Bottomline Technologies (EPAY) reported results for its second quarter of fiscal 2019 last night and shares are trading down double-digits today. The quarterly results were just fine and there was an improvement in bookings, which was the primary area of concern last quarter.
The issue today is full-year guidance, which came down in large part because of foreign exchange fluctuations. There also seems to be some confusion in the analyst community, which may have been looking for 15% to 20% growth in subscription and transaction revenue. Management is saying growth will accelerate, but that growth rate range is a 2020 milestone, not a 2019 one.
The punchline is I think the company is healthy and will deliver the growth necessary to pull shares out of this funk and deliver the type of return we expect. It’s just a matter of how patient we want to be.
Today, I’m moving Bottomline to Hold. This isn’t a dip we want to buy right now. Let’s hit the pause button and revisit the stock next week after the quarterly filing can be analyzed and we see if the market gives Bottomline a little more credit. I’ll follow up with more details early next week based on the 10Q filing. For now, Bottomline is a Hold. HOLD.