New Hampshire based Bottom Line Technologies (EPAY) makes complex business payments simple, smart and secure, explains growth stock specialist Hilary Kramer, editor of GameChangers.

Corporations and banks rely on Bottomline Technologies for domestic and international payments, efficient cash management, automated workflows for payment processing, bill review and fraud detection. The company provides its services primarily through two platforms:

Paymode-X is a software-as-a-service solution that allows businesses to migrate easily from paper invoices to electronic pay processes than enable increased efficiency and security. The size of the Paymode-X network is significant, as 450,000 businesses either pay or get paid through the system.

PTX enables businesses to efficiently manage key business processes such as making payments domestically and overseas, receiving payments through a variety of channels and protecting payments from fraud and error. 

Other businesses operated by EPAY include financial messaging, digital payment solutions for banks, legal spend management and legal claims management for insurance companies, as well as fraud and financial crime solutions.

Bottomline Technologies just reported fiscal first-quarter results last night. While EPS of $0.22 vs. $0.31 in the prior year period were $0.03 less than expectations, the shortfall reflects heavy investment in marketing and product development for future growth.

Revenue growth, on the other hand, is tracking up at a healthy 10% annualized rate, with subscription revenue (up 14.9%) now accounting for 84.5% of the total top line. This is a key turning point.

The growth in subscriptions, in turn, was driven by a very impressive 31% gain from the Paymode-X. This is important, as it shows the company is making progress going beyond electronic payments and moving into complete enterprise cash cycle management.

The stock held up relatively well today in a weak market despite the earnings miss, so it's clear that Wall Street sees good things ahead in terms of growth. Subscription software models remain a hot theme, and as long as the company can maintain its goal of 15% to 20% subscription revenue growth, the shares should do well.

In summary, EPAY is an attractive company with recurring revenue and rapidly growing businesses. The market will recognize this growth potential over time. EPAY is a buy below $48.

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