Xro - xero

[pierre]

Finally getting back on track and closing in on $100. I tend to think the covid recovery will be a great catalyst for increased growth in cloud accounting and I hope Xero will do well.

XRO showing in my portfolio at equivalent of NZD103.00 last night. Amazing!

Very happy holder here - just wish I'd bought more when I invested at $5.30. I wonder how many are still holding from the time XRO was on the NZX at around 10 cents?

[artemis]

XRO showing in my portfolio at equivalent of NZD103.00 last night. Amazing!

Very happy holder here - just wish I'd bought more when I invested at $5.30. I wonder how many are still holding from the time XRO was on the NZX at around 10 cents?

Bought in at a similar price, after watching for a year. XRO was very risky back then, could have gone either way. And actually did have big ups and big downs.

The NZX is going to lose more companies, not necessarily to the ASX, and should reconsider a JV with the ASX.

[moimoi]

Wow...Just WOW!!

[RGR367]

Yup, the Waddle acquisition is a WOW so on track still to get to 125 next year :t_up:

[Nor]

Bought in at a similar price, after watching for a year. XRO was very risky back then, could have gone either way. And actually did have big ups and big downs.

The NZX is going to lose more companies, not necessarily to the ASX, and should reconsider a JV with the ASX.

You guys must have bought some of the ones I sold. Luckily I kept a few.

[artemis]

I think this is the first time Xero has gone over $AU100.

[Filthy]

it looks like there was an off-market trade of 2,000,000 shares @ $99.00 ......$198M!

[mikeybycrikey]

it looks like there was an off-market trade of 2,000,000 shares @ $99.00 ......$198M!

There are a couple of news articles today about this. Seems be be Rod Drury selling down a little more.

[Baa_Baa]

There are a couple of news articles today about this. Seems be be Rod Drury selling down a little more.

Might be part of settlement with Anna? Between Rod, Anna and Scott, they hold/held 11% of the company with 15719779 shares*. Do the maths on that!!!!

*Companies register

[Motley Crew]

XRO showing in my portfolio at equivalent of NZD103.00 last night. Amazing!

Very happy holder here - just wish I'd bought more when I invested at $5.30. I wonder how many are still holding from the time XRO was on the NZX at around 10 cents?

I bought in at the outset in 2007 @ $1 IPO. They drifted down to about 67c from memory - never went anywhere near 10c. After topping up to the max in both SPP's at 90c and $2.75 I have held ever since, and added a few more in the NZ$20 and AUD$20 range on the way back up from the 2014 pull back. Very nice thank you very much. I rang Rod in March 2014 when the price was dropping off the $45 high and he just said put them in the bottom drawer and forget about them. Easy for him to say. It was hard to do, but glad I listened to him. He had no idea why the SP was dropping so fast other than it had risen equally fast. If you look at INTUIT by comparison in the US, the main competitor over there (forget MYOB), the XRO SP was always destined for $100+. I don't forecast a ceiling for them - if they were $200 in 5 years that would not surprise me either. I can wait. I recommended others get in at $80 back in June and they thought I was crazy. They did however buy some and are now very thankful they did. Hop on for the ride. It's not too late

[RTM]

https://www.digitaltrends.com/business/quickbooks-vs-netsuite-accounting-software/?utm_campaign=67030_Deals_NetSuite_100620&utm_medium=email&utm_source=dotdigital&dm_i=6MG2,1FPY,134TSN,6ILO,1

This may be of interest to some.

[RGR367]

Yup, the Waddle acquisition is a WOW so on track still to get to 125 next year :t_up:

For $125, it's looking like even before this year is over.

[moimoi]

Up like 30% in a month.

Apparently Red Bull gives you wings...

XRO. gives you flight... :lol: :t_up:

[Filthy]

$140M traded & up 12% - on no news.... seems a bit strange. leaked results maybe?

[pierre]

$140M traded & up 12% - on no news.... seems a bit strange. leaked results maybe?

Some good news must be known somewhere - SP is up around $13 as I write - after a $4 drop yesterday. Current SP is only a few bucks short of NZ$140.

We need the yanks to elect Joe Biden every week if this is the impact he has on the market!

[Beagle]

Just cracked $A130 !!

[winner69]

Just cracked $A130 !!

You still holding ....cool!

Or just your Barrimundi ones

[moimoi]

A surge in Xero shares pushed the ASX technology sector up 2.9% despite the Nasdaq falling 1.4% overnight.

Xero included in MSCI index shares are up 11.4 per cent to a record high of $128.12 this morning, with enormous trading volumes.

The company has not released any news but has been added to the latest MSCI Global Standard Indexes.

This means fund managers following that index have to include Xero by 30 November, hence the rush to buy. Xero is the only Australian company to be included in this quarterly re-shuffle. There were no Australian deletions.

- From SMH markets live thread this afternoon.

[theace]

Any ideas of why the 'halt'?

[artemis]

Speeding ticket?

[Motley Crew]

No - They couldn't catch them. A$137 today. Live Long & Prosper

[Shore]

AUD$155 at the moment, incredible. Any other holders still here watching this?

[RGR367]

AUD$155 at the moment, incredible. Any other holders still here watching this?

Yes and that prediction of being $256 by end of next or by 2022 might just happen, you know :cool:

[Toasty]

AUD$155 at the moment, incredible. Any other holders still here watching this?

I'm here and watching. The run up over the last few weeks has been quite incredible. I remember a prediction from an analyst a few years ago suggesting $700. Doesn't seem quite as unlikely now.

Trying not to get too caught up in the "stonks never go down" mentality.

[artemis]

Interesting to compare share prices Xero [147AU] with Intuit [365US] and Sage [582UK].

Market cap Xero [21B AU] with Intuit [96B US] and Sage [6B UK]

Employees Xero [3220] with Intuit [10600] and Sage [11647]

I used Google Finance to compare, the charts go back more than 5 years and are quite fascinating. Xero behaving very differently to Sage which has flatlined for years and may indicate where Xero SP is heading. Spot the difference in employee numbers.

[Filthy]

Interesting to compare share prices Xero [147AU] with Intuit [365US] and Sage [582UK].

Market cap Xero [21B AU] with Intuit [96B US] and Sage [6B UK]

Employees Xero [3220] with Intuit [10600] and Sage [11647]

I used Google Finance to compare, the charts go back more than 5 years and are quite fascinating. Xero behaving very differently to Sage which has flatlined for years and may indicate where Xero SP is heading. Spot the difference in employee numbers.

nice; good comparison. think it would be good to overlay customer numbers & growth rates as well?
Intuit at 96B shows just how big the market is and how much more growth there could be...

[artemis]

... Xero behaving very differently to Sage which has flatlined for years and may indicate where Xero SP is heading...

Wasn't v clear, sorry. I was referring to Sage SP as an indicator not to Xero SP flatlining. Though it will at some point I guess.

[RGR367]

Market not liking the Planday acquisition as announced today. It's positive thing for me as almost half of the acquisition will be paid in XRO stocks.
And though I already got heaps of it, another 3 bucks down and I'll be thinking of getting some more again.

What's there not to like about the announcement?

[mondograss]

Market not liking the Planday acquisition as announced today. It's positive thing for me as almost half of the acquisition will be paid in XRO stocks.
And though I already got heaps of it, another 3 bucks down and I'll be thinking of getting some more again.

What's there not to like about the announcement?

The nasdaq has taken a bit of a caning the last couple of weeks, down about 1400 points since mid feb, unlikely the announcement had much to do with it, just general market sentiment pushing it down.

[moimoi]

Market not liking the Planday acquisition as announced today. It's positive thing for me as almost half of the acquisition will be paid in XRO stocks.
And though I already got heaps of it, another 3 bucks down and I'll be thinking of getting some more again.

What's there not to like about the announcement?

Could be wrong given the paucity of information provided in the announcement and conference call...

But they appear to have paid the thick end of $1m per user for a 17 yr old (growth) company with modest revenues.....with integration and product development costs to follow.

Cash has a value of next to nil currently...issuing shares that are rapidly declining from $155 to $113 is problematic for existing holders..

GLTA

[Toasty]

Full year 2021 results out. Watching the market with interest today given the carnage in the US.

[BlackPeter]

Full year 2021 results out. Watching the market with interest today given the carnage in the US.

Well yes, revenue and earnings are up - its now a royal 13 cents per share, which leads to a PE of 1000! Wow! Customers keep growing (well, the customers probably as well, but I meant to point to customer numbers), but it sort of feels that growth rates are slowly dropping. Not sure I like that given that they had Covid tail wind.

Given that this is now already the second year with a positive result (i.e. they made money vs losing some) I'd expect that markets might slowly start to re-price the share according to its money making abilities. Lets see, how this will work out.

Great share, but in my view (as many other great companies) too dear at the current moment ...

[silu]

I don't know XRO very well but have been interested in perhaps getting in there. However on first view this report makes for very sober reading. I can't see anything but a painful correction in share price.

[mikeybycrikey]

Ouch! Down about 10% today.

I didn't actually think it was a particularly bad announcement although I haven't read through that carefully.

Growth has been slowing for a while and I thought that with covid that growth might have come to a complete halt.

[RupertBear]

Ouch! Down about 10% today.

I didn't actually think it was a particularly bad announcement although I haven't read through that carefully.

Growth has been slowing for a while and I thought that with covid that growth might have come to a complete halt.

Ouch indeed! I thought it was quite a good result so I wasnt expecting a 10% drop, yikes, what do I know! :mellow:

[RGR367]

Not that we have to post it but just like old postings, it's nice to know that XRO is still improving https://www.xero.com/blog/2021/08/personal-tax-live/?utm_source=social&utm_medium=twitter&utm_campaign=personaltax

[sb9]

Looks like XRO had a bad H1 FY22.



HY REVENUE FROM ORDINARY ACTIVITIES NZ$505.7 MILLION, UP 23%
HY NET LOSS NZ$5.9 MILLION VERSUS PROFIT NZ$34.5 MILLION

[dobby41]

Looks like XRO had a bad H1 FY22.



HY REVENUE FROM ORDINARY ACTIVITIES NZ$505.7 MILLION, UP 23%
HY NET LOSS NZ$5.9 MILLION VERSUS PROFIT NZ$34.5 MILLION


How can they still be making so much loss after so many years at it?

[winner69]

Clare Capital thinks a great result

Some big @Xero numbers out today: annualised monthly recurring revenue (AMRR) at NZ$1.1BN (⬆️29%), 3M subscribers (⬆️23%), 87% gross margins. Congrats team - those are some serious achievements. And the share price is down 5% today. Markets are tough and expectations are sky-high

[peat]

How can they still be making so much loss after so many years at it?

Xero noted its operating expenses, including the costs of integrating acquisitions, increased as a percentage of revenue to 83.4%


Increasing reinvestment
"Greater clarity and renewed confidence in the economic environment over the past 12 months drove
increased reinvestment into customer growth opportunities," it said.
"This included increased spend on subscriber addition initiatives andinnovative brand awareness campaigns in a number of markets."
Product design and development costs increased 51% to $166.8m, about 33% ofoperating revenue and at a similar level to the second half of the previousyear.

[artemis]

How can they still be making so much loss after so many years at it?

I used to turn up to the ASMs when they were in Wellington. Clear message every time - no plan to make a profit or pay a divvie. It's all about growth. Since in those days the SP was in single figures, yep been a wee bit of growth.

And every time Rod Drury was at the door shaking every attendees hand.

[artemis]

Herald today - Why analysts are sticking with Xero after its swing to a loss (paywalled)

Jarden analyst Elise Kennedy -

"''If you had market leadership in an estimated $74b but had captured only 1.1 per cent share, would you continue to invest to capture more or focus on monetising existing customers?" Kennedy wrote in a note to clients. She reiterated her buy rating, and kept her 12-month target at A$150.00.''

[dobby41]

I used to turn up to the ASMs when they were in Wellington. Clear message every time - no plan to make a profit or pay a divvie. It's all about growth. Since in those days the SP was in single figures, yep been a wee bit of growth.

And every time Rod Drury was at the door shaking every attendees hand.

A while ago but they need to make profits sometime.
They must have a heap of tax credits (losses) stacked up against future profits.

[Panda-NZ-]

It would be nice if investors had this much patience with longevity biotechs and nuclear fusion.

Bill.com seems to be experiencing similar things to xero in the US.

[moimoi]

Vicious..

Lost a 3rd of its market cap inside a month..

If AU$90 doesn't hold where to next...?

[BlackPeter]

Jeez ... I am not really following them (always looked too dear) ... but yes, the downturn looks impressive.

On the other hand ... I still see (at $105) a forward PE of 275 ... and lets not get started on earnings growth ...

So - what would this share be worth if we assume a fair PE of 10 :scared: - or even say 20 hoping for a 10 % (earnings) growth pa?

[mcdongle]

Have they ever made a profit?

[Beagle]

They made a "massive" $3.3m profit in 2020 http://research.iress.com.au/IDS/old/20200514/02235128.pdf?uid=CA7CB10215C51CAC2BF49E8642FFD89C1 D750000BE63B3EDBDC5E540093D250091850000&ppv=

I note this bit from the 2020 annual report "At the Deloitte Top 200 Awards in 2017, Rod
was named Visionary Leader of the Year.
He was named Ernst & Young New Zealand
Entrepreneur of the Year in 2013, and is a
member of the New Zealand Hi-Tech Hall
of Fame".

I think he's convinced a lot of people that technology is beautiful. Me...I have never been impressed with a company that basically never makes a profit.
I think its fundamentally wrong to give people business awards without the proof that a company is capable of consistently high profitability.
Its analogous to handing out art awards to people who throw a rubbish bins contents onto a blank canvas and the judges read something meaningful into it so that wins the award. (Yes that really happened one year with N.Z. art awards).

Sometimes I am asked as an accountant how XRO could possibly be worth the share price it is. I have never been able to give an answer so have never been an investor.
I think a time of reckoning is coming for high flying tech companies that lose money consistently. In the years after the dot.com crash at the start of this century the NASDAQ lost ~ 90% of its value. History starting to repeat ? You be the judge...

[Baa_Baa]

It was always going to happen wasn't it, swimming naked. Probably not NZ $13 again but who knows how low this could go this time.

[BlackPeter]

Have they ever made a profit?

Of course. FY 2020 - 2 cents per share and FY 2021 13 cents per share. Looking at just these two data points their earnings CAGR is not even too bad :p , but never mind the PE and analysts forecasts for FY 2022 :) ;

[mcdongle]

Was just wondering if they had been caught up in the nasdaq selling of co's that have never made money

[Beagle]

Was just wondering if they had been caught up in the nasdaq selling of co's that have never made money

Yes absolutely ! Listening to a guy on CNBC he described it like this. The Nasdaq companies that will start make money in say 20 years time have enjoyed unprecedented tailwinds from valuing the net present value of all future earnings with the 10 year Govt stock rate as low at 1.4%. Change that discount rate to a more normal 3-4% and their future earnings are worth a whole lot less.

Gambling, (lets not pretend its anything else), on whether a tech company might make money in 20 years time and grow quickly from there...or be a complete flop has never been my thing. Although I rate my nose to detect a feed coming in the medium term nobody can predict with any accuracy whether XRO for example really will make a fortune down the track.

I mean, come on, here we are a whopping 15 years since they listed and they're still not making money. I think Rod Drury has made complete fools of the judges who handed out those business awards and many other people besides and has been laughing his way to the bank for a very long time now on the back of what looks like for all intents and purposes a quasi Ponzi scheme.

Of course supporters would deny something so outrageous as to call this a Ponzi scheme and say future growth will generate huge profits....the same thing they have been saying for 15 years now. Can I have a Tui to go with that ;)

[artemis]

I think Xero will be on the right side of cloud history, and their primary target is global SMEs. There are a lot of them out there, lots on unsophisticated systems.

These are strange times but not hard to see useful cloud companies like Xero quietly continuing to add customers.

[Beagle]

I think Xero will be on the right side of cloud history, and their primary target is global SMEs. There are a lot of them out there, lots on unsophisticated systems.

These are strange times but not hard to see useful cloud companies like Xero quietly continuing to add customers.

Lots of other good systems out there too. More business does not necessarily mean a decent profit...as the company has consistently proved for 15 years now. If something waddles like a duck, quacks like a duck and keeps dropping duck poo...guess what...its a duck.

I'm sorry, but the numbers do not compute and no matter how many times they use the word beautiful in their presentations and marketing material in terms of the only thing that really matters to investors, earnings per share, this is a very, very ugly company. Of course in 5, 10 or 15 years time things will be different they will tell you, or will they ? The emperor has no clothes, plain and simple.

[winner69]

When I think of Xero getting more and more customers and not making any more money (probably more customers means more expense) i envisage Xero as being one big office (maybe a pseudo cloud) full of bookkeepers (people) who take what customers input and their bookkeeping stuff on it and then sends it back to them ....maybe like a 'cloud' with zillions of elves slaving away putting data in the right cubby hole so the users see what they think is a set of accounts

Suppose it is more efficient than that ....but the numbers say the efficiency isn't improving.

[mcdongle]

Yes there are an interesting few years ahead for sure.

[RGR367]

A director's husband got some shares as per today's announcement. And it moved the sp up :cool: So just imagine what's the sp will be when this downturn is really over :p

[winner69]

jeez - XRO below $100

[Baa_Baa]

Yes, quite the SP rout, off almost 40%, being sucked down by the US techs? That's big money for a $100+ stock. Anyway, technically $90 looks solid support and $94 is the 61.% fib retrace. Won't be getting any myself, even with very tight stops, until the short MA's cross up and the price crosses up above them, which will be a few days after the bottom, whenever that is. Fact is, since late December 2020 this has turned into a huge range trade. It's in the grips of the bigger market forces imo. Watch those too if you're thinking about getting some, or some more XRO.

[FTG]

Yes, quite the SP rout, off almost 40%, being sucked down by the US techs? That's big money for a $100+ stock. Anyway, technically $90 looks solid support and $94 is the 61.% fib retrace. Won't be getting any myself, even with very tight stops, until the short MA's cross up and the price crosses up above them, which will be a few days after the bottom, whenever that is. Fact is, since late December 2020 this has turned into a huge range trade. It's in the grips of the bigger market forces imo. Watch those too if you're thinking about getting some, or some more XRO.

The last couple of months have presented an absolutely beautiful textbook short trade, especially from when she cracked through $130.

Agree Baa Baa, circa $90 is looking like an area of strong support. Past behaviour gives no assurance for future behaviour, but historically when XRO has rebounded off a low it has done so with some vigor. RSI on the weekly is also starting to warn of an impending pivot point, even if only providing temporary relief for the Bulls.

[Nor]

Isn't hindsight wonderful?

[Baa_Baa]

The last couple of months have presented an absolutely beautiful textbook short trade, especially from when she cracked through $130.

Agree Baa Baa, circa $90 is looking like an area of strong support. Past behaviour gives no assurance for future behaviour, but historically when XRO has rebounded off a low it has done so with some vigor. RSI on the weekly is also starting to warn of an impending pivot point, even if only providing temporary relief for the Bulls.

~$90 did offer some support and a bounce, but unfortunately it's been sucked down with the Tech sector rout, now 50% below its ATH (half price) and at the 78% Fib retrace from Covid lows. Then now they've posted a $9m loss. Ouch.

[Valuegrowth]

Any reason trading at high PE? Can we expect high growh in this growth company in the coming years? Are you worry about thier debt level? Will there be laying off workers in the IT indusry in the coming recession? Is it risky to buy Xero right now?

[RGR367]

Reducing cost by cutting up to 800 global personnel is now priced by the Market this early an additional $5 to the sp. Is this the announcement needed for an uptrend?

[winner69]

Reducing cost by cutting up to 800 global personnel is now priced by the Market this early an additional $5 to the sp. Is this the announcement needed for an uptrend?

AFter many years they finally realised they undercharge so to try to make some money get rid of the people ... after all they are consumable

Still to need to charge more realistic prices for what they offer .... price rises next

[Aaron]

AFter many years they finally realised they undercharge so to try to make some money get rid of the people ... after all they are consumable

Still to need to charge more realistic prices for what they offer .... price rises next

Undercharge? I think they are significantly more than MYOB.

[winner69]

Undercharge? I think they are significantly more than MYOB.

Sales less than costs means they haven't priced the product right eh

Even 800 jobs going won't really fix things (that is ongoing sustained profitability and decent returns on capital)

Be interesting where outfits like Xero will be in a couple of years time

[nztx]

https://www.1news.co.nz/2023/03/09/nz-based-company-xero-announces-800-job-cuts-in-restructure/

Has growth stalled in other markets, or Xero reached a level of exposure where the next step
requires new initiatives for growth ?


Last $84.90
Change 6.280(7.99%)
Mkt cap ! $11.92B

[Valuegrowth]

https://www.youtube.com/watch?v=qsTRBAfhR4s

[Valuegrowth]

https://www.fool.com.au/2023/03/13/xero-share-price-dips-3-amid-silicon-valley-bank-fallout/

[Valuegrowth]

https://www.startupdaily.net/topic/business/canva-xero-and-freelancer-are-among-local-tech-companies-with-millions-in-deposits-in-failed-silicon-valley-bank/

[Ferg]

Thanks Valuegrowth. I was wondering about Xero's exposure to SVB. It appears it is about US$5m, or less than 1% of their cash. But given Biden's promise to pay all, the exposure could simply be a timing issue (of access to the cash) rather than a loss.

https://www.accountantsdaily.com.au/business/18290-no-material-exposure-to-troubled-svb-xero-assures-shareholders

[Valuegrowth]

Thank you Ferg. We will have to do our own research to find out the true story.

https://www.theguardian.com/business/2023/mar/12/why-silicon-valley-bank-was-so-important-to-uk-tech-sector

[RGR367]

There's really no need to post the annual report here so just look at the price now :t_up:

[RGR367]

There's really no need to post the annual report here so just look at the price now :t_up:

And I'm still looking at the sp. There must be something on their announced strategy/vision for FY25-FY27 that's moving the uncommitted/unconvinced lot.
GL to all holders.

[pedro.nz]

Saw this announcement today...

Xero (http://xero.com/), the global small business platform, today unveiled at Xerocon London (https://www.xero.com/au/events/xerocon/london/), groundbreaking technology underpinning its upcoming AI-powered smart business companion Just Ask Xero (JAX).
The proprietary technology helps ensure greater accuracy while using AI in the accounting process.
JAX, available in beta in August, will help small businesses and their advisors run their business more efficiently.
Customers and accounting and bookkeeping partners will be able to ‘Just Ask Xero’ to complete tasks like generating an invoice or editing a quote, either in Xero or other commonly used apps and devices that businesses use day-to-day, such as mobile, WhatsApp and email.

[nztx]

And I'm still looking at the sp. There must be something on their announced strategy/vision for FY25-FY27 that's moving the uncommitted/unconvinced lot.
GL to all holders.


Will a 1 July juicy price lift help ? :)

Nothing like a bit of general ledgering things upwards

[RGR367]

Will a 1 July juicy price lift help ? :)

Nothing like a bit of general ledgering things upwards

Back burner firing off....
https://www.marketindex.com.au/news/xeros-big-breakout-and-morgan-stanley-says-theres-more-upside-to-come

[Toasty]

Does anyone have any thoughts on Xero as a possible acquisition target? I've always wondered if someone like Microsoft would be interested as a way to get back into the personal finance/ small business space.

[moimoi]

Microsoft is such a behemoth now a purchase of XRO just wouldn't move the needle for them imo. Besides they are reportedly spending US$50B on AI buildout this year alone so thoughts and time probably taken up elsewhere.

Someone like SQ2 (Block) more of a possibility imo.. XRO more closely aligned with Blocks "self employed /small business" focus and Block has previous form down this end of the world with the early 2022 purchase of BNPL operator Afterpay.

GLTA.