I use ASB Securities - the default view is delayed 20m but if you refresh, it goes live. I assume all the brokerage sites are the same, once you login.
Printable View
It is very easy to model to justify the price. Only think is can you justify revenue doubling for a few more years to come:
2013 2014 2015 2016 2017
Revenue 39 78 156 312 343
Opex (56) (84) (92) (102) (112)
Other cost (11) (12) (13) (15) (16)
NPBT (28) (18) 50 196 215
P/E 20 1,006 3,914 4,306
Sorry to burst your bubble mate.
Attachment 4630
Looks like the bot is back. Moosie can probably confirm...
Turmeric... be very careful. Shareprice is totally irrelevant in the long term scheme of things. Saying my company performs better because my shareprice is up whilst the other is down is immaterial until said share is realised. Ultimately it is the cashflows that your investment generates and gives back to you that will determine whether an investment is a good one or not.
I think they are using MS SQL Server (http://blog.xero.com/2013/01/migrati...y-data-center/) so on that basis a relational database.
Why do you ask?
Edit: The information about the database is right at the end of the article in the link.
This is big brother stuff. I wouldn't touch such things for my co. This is all designed for one thing, that is control of people and companies. Companies and people don't realise this but they will have to pay for this..
I hadn't thought about that angle, I will need to do some more research. I must admit I was a little surprised to find they use a relational database from a scaling and performance point of view. I would have thought they were using an object-orientated or NoSQL platform.
I was implying more in general turmeric, not really having a dig at anyone. I have seen many clients in the past hold onto IPO shares for a 5 fold gain, not willing to sell any stock at all and having seen the SP fall to below initial IP levels. Im glad you have realised some of your gains.. indeed you have done well and in your position I would be holding on to some at least for the ride up. Fundamentally I will not be purchasing now but I have already outlined those reasons earlier.
I have a feeling that in a few years time we'll look back on today's SP and think it was dirt cheap. ;)
I equally have a feeling many will look back and think why did I buy those Xero at 15-20 bucks...time will tell
Sky TV was overtaken by Xero today and it made a net profit of $123 last financial year - although clearly its future revenue streams could be pressured by internet sports etc changing their market. We live in interesting times.
Excuse me if this is already common knowledge but ive just seen on Fishpond a book for sale"Xero For Dummies" you know the huge global black and yellow series. This has got my int more than anything else.
Dummies pay more.:)For you $35.83, great spiel about the business too.
Cheers , 250 million books and 1800 titles, what a business!!.. I confess i have an "Imac For Dummies" but have barely opened it, dumb aay;.. more forgetful really.
And on it goes. $18.65 up today. Maybe a bit of hype in the US at the moment with the lead up to XeroCon on the back of the Americas Cup in San Francisco.
Pretty stupid only having 3 challengers, one of which doesn't have a boat and another refusing to sail.
Having said that, TNZ looked very impressive foiling with the SanFran skyline so close in the background. It could be a really interesting spectacle, if only there was some actual racing.
I just hope we win it, so that $36m of taxpayers money is not wasted and the next series is raced between North Head and the viaduct so all can enjoy it!
Interesting too isnt it with stocks like this one and others.... when they are going up there is a lot of chatter etc. But on the way down things often become eerily still :) No time to panic, this is just profit taking isnt it? :P
as I write down another 30 cents.... 1700 hit :)
Dead cat bounce bound to happen but Im not going to touch this one!
Lol.
And only yesterday brokers were saying things like:
"There's been huge hype building into that share price," Williamson said. "Analysts have been crunching the numbers and it is a pretty exciting end result if it all goes to plan. Investors are counting on Xero increasing that customer base significantly."
I am still a way from understanding the market.....a long way...
everyone who is holding these shares must constantly be on the edge pissing there pants. as soon as there is a bit of red. bulk selling sets in. if it pulls back below $15 i may jump in
Lots of doom and gloom on this thread. 8-)
Good to see a correction after such a hefty run up. The story hasn't changed so no reason to sell. If anything the fluctuations we may now see, prior to the AGM, may be the only buying opportunity people get, prior to them getting large USA exposure come Sept.
Yes, I am a holder of Xero and will remain so. Looking at the bigger picture here so no troubles with some interim noise.
Early to say but it may have bounced off the $16.84 mark and turned around again as people took a stand and realised that there was no reason for it to be going down....or up for that matter.
I am reminded of a flock of birds eating bread who scatter when startled and then drift back slowly at first and then more quickly as they realise the other birds are eating all the bread...
It would be unnatural if there wasn't some level of profit-taking going on... I actually feel a little bit better when the stock pulls back a bit.. the net effect is always for the best.
Natural for SPs to fluctuate, they all need to breathe, and I guess given the rate of ascent here it takes bigger gulps of air than any other to keep climbing. Its just an uncomfortable ride to have to heave along with it and frankly its giving me nosebleeds.
I like the bit where it says: "Quickbooks product manager Nora Tucker said she hopes the move will “attract Australia’s best programmers” into working with the product"
I don't want to be a Xero acolyte but I feel it sounds a bit desperate. I am sure Rod will have something to say.
Bolding done by me.
The bull goes up the stairs and the bear goes out the window.
All joking aside, still plenty of upside I believe. Healthy correction today though and I can see it extending for a while longer.
Article from a Wanganui accountancy firm. Seems her business is very busy converting happy clients over to Xero :
http://www.wanganuichronicle.co.nz/news/cloud-accounting-sends-firm-sky-high/1942763/
KW / turmeric , have either of you got any links to any posts / sites regarding basic info / explanation of TA? New to investing and would like to learn as much as I can about it and this method seems quite interesting / useful to me. Thanks very much :t_up:
Appreciate it guys - hadn't noticed KW's thread and I'll for sure give that a read. Definitely wouldn't consider myself a trader - as you said just trying to teach myself basic levels of fundamental analysis and then looking at good timing to add the 'cherry on top' :) Hopefully can provide my 2c worth one day and particularly interested in what you've mentioned here as a XRO holder myself!
A positive blog post for those holding: http://1234567890.typepad.com/xero/2...ks-online.html
I am not sure of your point here Steve. Are you saying that accounting systems provided by third parties are not a good idea? My understanding is that it is very easy to export your data from any of these systems and then reimport it into another system or even a simple spreadsheet.
Or are you selling an alternative system that you have designed and think is simpler? Not being a programmer most of the info above is lost on me and I assume that you are just providing a description of how your system works in the hope that people will adopt it.
Is this forum the launch pad for a competing product?
Also I assume that Zero that you refer to is Xero? Is this a deliberate attempt to ridicule the company that this thread is dedicated to or just a misunderstanding?
I think you've made your own point surfersteve - the average small business owner has no clue what you just said and frankly doesn't want to know (they have a business to run after all). They want to pay a nominal sum every month that they can expense and have an intelligent and simple system run it for them. You also don't take into account the years of change and innovation ahead of us - complete online tax filings at a push of a button, valuable information about the vertical you're working in - all of this that Xero will continue to innovate and stay on top of, stuff that the average small business user has no hope of managing with their simple text file or excel document as you advocate.
Blah, blah, blah. Didn't understand much of that.
Or, you could pay Xero $600pa and have a system that has system controls audits done on it. I wouldn't want to be an auditor, auditing a custom built accounting system (in fact I wouldn't want to be an audit but that is beside the point).
Yes - only $600pa - Which I value at less than 2 hours of my time. How long would a spec built accounting system take to build and maintain? Remember Xero is constantly being upgraded and improved.
I hope you have a marketing department in this company of yours because somebody needs to translate this into English. I haven't got the faintest idea what you are talking about.
I am also struggling to see how this relates to Xero? I think there is a separate forum for product advertising. Maybe you should post this stuff there?
I think any company on the interwebs is doomed then!Quote:
my apologies, the point i have badly floated is that a product that is built using the same technology that is freely available to everyone, html and javascript and SQl is a product that any company in any country can compete against. Zero sum game...
So thats what you are saying. There is nothing unique about Amazon.com, in fact it was copied in NZ by Trademe. Now that Trademe has the first mover advantage in NZ, Amazon hasn't even bothered.
I have always said that Xero biggest risk is that one of the big established players will launch a similar product. Currently their products aren't as good. There is also competition from new small companies like Wave.
But you also need to remember that Xero only needs to get 1 or 2% of its target market in the US and it will surpass its current target of 1m customers.
Dude, SuferJoe or whatever .... Think about what you are saying here. Having quad core processors for the 'average' user to access software. But that is gong back in time from where we are heading with cloud technology, where all the user needs is a 'dumb terminal' that only has browser capabilities. Because that is all they need! Let the companies that run the services look after all the heavy infrastructure and the resultant security, backup, compliance issues. That's what this shift is all about.
Sure you and your team (with due respect, maybe Indian) have written some products ... I wish you the best with gaining traction with them. The thread here is not your target market though. Knock on the door of the Accounting Assoc, maybe or got to the Zero thread, or create one if it doesn't exist.
Whats far more interesting is what is happening with the Xero share price today. Down $1.30. That's a massive drop following on from the sell-off over the last week or so.
I'm not aware of any news that would have precipitated this - just seems to be a sell-off followed by some panic to get out (perhaps by those who recently bought in at high prices) before it goes even lower which of course makes it go even lower. It will be very interesting to see what happens. Markets are funny things expecially when there are no fundamentals to assess and there are widely varying views on the strategy and implementation.
Please provide a link to any article stating this. I want the news article link, not heresay.
The only big thing I see FB working on is how to monotise there business model sufficiently via mobile devices, which has less real estate space for traditional adverts. And this answer would probably more relevant to the SNAKK thread.
But we digress from Xero with this chatter.
I think you will find steve, if everybody designed their own accounting system as you have described, there would be so many errors/issues with their software that Audit firms would need to be massive (as they would need to audit your individual custom made computer system for errors every audit), reliability of accounting systems would drop (meaning more issues down the line, tax, estimation of GDP, growth, you name it) and most IT people would be employed fixing/maintaining accounting systems.
This is the beauty of having a few ubiquitous systems, you see. The companies that make them have audited the systems hugely, meaning less problems, higher accuracy and systems that Audit people are used to seeing and can trust. This in turn relates to better company performance and better economic performance.
You will find a point, as your company grows, that a VBA/Excel solution just doesn't work anymore. The overheads become to great, the demand for changes becomes too many and the ability to make changes becomes more difficult.
As another IT guy with 10 years experience in backend financial systems for everyone from Banks to NGO's, I can say this with some authority.
Besides, Xero's solution is a lot more flexible than yours. Can your accountants log into the data from anywhere (if they are separate from your business)? Can you view your accounts from your smartphone? Can you use any of the add on components which work with Xero simply by paying a fee (e.g. if you needed to build an add on inventory system... you could just pay for one using a Xero partner, you would have to build one from scratch)?
Surfer Steve - while I think it would be helpful it you expressed yourself more succinctly if you continue contributing to this forum, you do raise a point that has had me thinking for a while. Xero is designed on a platform that was state of the art in 2006. It is now 2013 and the wider environment has changed. Is the Xero platform what you would do if you were starting an accounting software business from scratch now? Will Xero be superseded by a better and cheaper way of doing things?
I have recently seem some of the new MYOB software and it is very powerful and easy to use and of course they have recently rolled in BankLink. Reckon are also doing some interesting things with ReckonOne. In some respects the "incumbents" as Rod likes to call them are now more advanced than Xero - because they started later.
I still maintain my line on Xero that it is a company doing many things very well but also facing strong and growing threats - both product and price wise.
surfersteve is probably right that technology is easily outdated. This is completely true. Though, it is a little bit misleading if this is the reason why Xero will lose its advantage quickly. I think Xero is not only competing on its technology. It is reinventing the collaboration among accountant, users and developers which are the key players in its business ecosystem. Technology can be easily copied by competitors. Many new technologies are out there now a day. But the business ecosystem is way too hard to copy. It needs money, time, resources and of course technologies to shape a competitive business ecosystem. When Rob Dury keeps saying that the old desktop accounting software was outdated, I believe he was seeing that the collaboration among the accountant, users and developers are restricted by the outdated technology rather than the outdated technologies makes a bad account software. Simply creating/updating a software using latest technology is not enough to make a good accounting products. By saying this, I did not mean that the new way would make Xero success for sure. But at least we see Xero takes the leadership in creating more value together with accountants, customers and developers using its technology.
Your point is interesting. Could you explain a bit more on why this is dangerous?
I don't have any knowledge on accounting so I do not have the ability to identify what is dangerous in terms of the way to do accounting. What I understand is if you have an automatic transactional import in your accounting system, you can still control the level of shared information or modify the transactional data to fit what you need. The accountants process what the business owners give them rather than sneaking into the company's system and do there work.
Is nice to see DIL not going down in Sympathy with XRO. Still, can't see no reason, albeit profit taking, why Xero will go down still. Good reentry points coming up. imho. Think $11.80 is a bit ambitious, but we still do have till 1st August till AGM. Anything possible even if it makes no sense. 8-)
SurferSteve - and all that has nothing to do with the accounting system. The accounting system sole aim is to accurately record all transactions, whether real (ie cash changing hands) or notional (ie Journal entries between related parties).
I note that all notional transactions must be backed up with legal documents so the accounting system is only doing its job - recording the debits and credits.
Even your Bespoke record keeping system needs to record the legal transactions regardless of whether cash has changed hands.
jesus i'm going to need some heart medication at this rate
Price Enquiry into Xero
https://www.nzx.com/regulators/NZXR/...cements/238682
KW, Just wondering if you could share what software you use for charting? thanks
Thanks for the advice about the monitoring tools.
Do others agree with that or use other sites and software?
Try big charts (20 minute delay)
http://bigcharts.marketwatch.com/kaa...045&mocktick=1
It seems my 5 minute chart I posted (#2109) is updating itself....It has data to the end of today...but I posted it on ST 12.13pm
Lets see what happens tomorrow.
Can I point out that as someone who makes technical decisions at the end of the day, that this recent blip has yet to trigger any sort of alarm.
Attachment 4657
Best Wishes
Paper Tiger
Hi randoman
It is the one and only instance of TigerCharts which I wrote as a self-learning exercise way back in Oct 2008, when I had a little gap in my work schedule, and which I update occasionally.
It is Windows program written in C# and uses WPF (Windows Presentation Foundation) for the purty bit (User Interface).
All the stock data, which is scraped off the internet by various means is stored in a SQL Server database.
Best Wishes
Paper Tiger
Xero article from stuff : http://www.stuff.co.nz/business/mone...ached-its-peak
giventhei huge losses, it costs them quite a bit, BUT they are focusing on accounting practises.
So they don't just sign one customer, they sign all the customers of an accounting practise plus all thei future clients. It probably takes a few years to transition them all over.
Doesn't really answer you question - sorry.
Finally agree with you Steve - Security is a concern. They haven't had any issues yet but that is no guarantee. The likes of Dropbox has already been hacked.
Competition is arriving? (This thread has been very quiet for a while... strange)
http://www.stuff.co.nz/business/8963...challenger-SAP
[QUOTE=blackcap;418792]Competition is arriving? (This thread has been very quiet for a while... strange)
http://www.stuff.co.nz/business/8963...challenger-SAP[/QUOTEAs companies grow, it is inevitable some will shift off the platform. Xero itself has grown too large for its own software and now uses cloud-based software from Netsuite
This shows that there are limits to Xeros usefulness. Observing the resent rise in XRO share price I wonder if holders are aware of this.
XRO is far too big to be using its own software it targets the SME market. The definition of that, in NZ at least, is very small. Anything over $10m or with multiple cost/revenue centres is not their target market.
Edit: MED defines an SME as less than 20 FTE employees. http://www.med.govt.nz/business/business-growth-internationalisation/pdf-docs-library/small-and-medium-sized-enterprises/structure-and-dynamics-2011.pdf
CJ I thought a company like XRO might make accounting software for their own use and learn some lessons along the way. Those lessons learned could come useful later when their uses expand their business.
This is obviously not how this industry works.
I find it a bit strange that they don't use their own software. You'd think that the costs involved in enhancing their software to do that would be offset by the money saved by not paying an external company, and also the additional customers they could sell their product to. I guess there must be a huge jump between the SME market and enterprise level stuff.
[QUOTE=forest;418805]Since Xero's revenue is all monthly recurring billing, I would have thought they'd have very basic accounting needs. Virtually no inventory, no debt, tidy capital structure, essentially a one product company. Accounting should be straight forward for a business of 40 million in sales, which is not traditionally considered a large business, market cap excepted, of course?
The only complexity I can see is multi currency, which Xero handles.
So, where is the complexity and how have they outgrown their software so fast?
Number of employees has far more to do with the payroll system. In the accounting system, each payroll category tends to be a one liner, regardless of employee numbers.
Either way, it should make limited difference to the complexity of the accounting needs.
As I say, with monthly recurring billing for essentially a single product company, the accounting shouldn't be hard.
Unless the system slows to a crawl or simply doesn't support, past a certain transaction volume? (anyone know?)
150,000 customers/deposits each month growing to 1m+. Staff in at least 4 countries.
You can't design software to cater for the self employed plumber though to a full ERP system for a large multinational.
They are focusing on SME (I personally feel MED defn is too small but up to say 150 FTE depending on type of business). They are much much bigger than that.
CJ,
Yes, but 150,000 very repetitive, regular payments each month. The only complexity there being multi currency, which they handle.
Staff in 4 countries not relevant - apart from Australia, they don't do payroll, so they're presumably using other systems. We're talking the core accounting here.
Computers are meant to be good at automating the regular - in terms of complexity, a retail shop with 3,000 stock items and a couple million dollars of sales should be harder to automate in an accounting system that 150,000 transactions that are recurring revenue billings.
Unless it just doesn't handle big volumes.
Or there is something we're missing?
Seriously, this type of reaction indicates a significant lack of understanding of the product. It is like saying that a company that makes hand-shovels save themselves some money and use their own shovels for large-scale earthworks instead of using excavators, etc. And for those who think that hand-shovel makers, relatively new to the market, should launch into excavators, the hog would suggest you have never run a business.
Yes, there is, and it's something big: SME accounting is a different proposition to corporate, multi-juristiction accounting. Some similarities, yes, but not as much as you are speculating exist.
It always amuses the hog when somebody suggests (not you Stranger Danger) that a lawyer who works in banking might be able to help out with an immigration case, or tax-planning, etc. After all, they're all lawyers aren't they!
Hardly a fair analogy. Xero are in the software business. They can develop an enterprise solution using the same type of tools and skills as they use now - unlike a company manufacturing hand-shovels who would need radically different tools and skills to make excavators. It would take Xero time to develop that solution, but what I was saying is that that cost would be partially offset by them using it themselves and thereby saving licencing costs going to another provider.
Exactly.
There is no need to try and target the large end of the market as well.
I note that they are continually improving their product. While some companies will grow out of XRO, some will grow at the same pace. I note today that purchase orders are due to be released by the end of the year. Nothing and I mean nothing in the organisation I work for gets paid for without a PO Number. We are at the extreme end of the size scale so use SAP but at some point, smaller business will grow to a stage where they require PO as well. Quotes are also being worked on and I am surprised they haven't rolled this out yet as they are important for many small businesses - to date they would have to rely on a add on and suffer the extra cost.
Yeah... CJ... did you catch that...
Since some of you are a bit confused about why XRO doesn't use its own software, I got Forbes to write a quick article about teir 1 and teir 2 products ;)
http://www.forbes.com/sites/quickerb...ou-should-know
Xero is targeting the small end of the market. There isn't necessarily a "management team", there is the owner operator or the owner manager. Sure they could get a desktop product hosted in the cloud or they could go to a one stop shop, like Xero, who bundle the two together for a full SaaS solution. I dont know what their typical user is so I can only use the ones I am aware of:
2 x cashbook - rental property company and share investing company. Could do in excel but for $120+GST a year, I value the time saved at more than this.
1 x full - Brothers business - one owner operator with 20 front line staff. Between my brother, me and his wife, we keep this up to date. Previoulsy they were doing more work (MYOB) plus paying their accountant $5k. If they got an accountant to do my role, they would probably charge $250pm ($3k which includes software costs)
Agree once you get to the next level, you may find a cloud product does not have all the features required (full ERP) so go for a desktop solution, either hosted on your server or via a cloud provider.