Misleads. Do elaborate
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Never say die when there are 33 minutes to go
Remember Adelaide 36ers Vs NZ Breakers
NZB have the ball with 12 seconds to go and leading
Adelaide 36ers steal the ball and win
the number one challenger in the United States.
Really? With less than 16000 customers in the US? Maybe that's a fair statement if you consider QBO, freshbooks, kashoo and all the other together as the incumbent.
Xero continues to deliver features and innovation at a pace faster than the incumbents.
The incumbents often have those features already and they have been tested. Look at how long it took them to deliver purchase orders and how much love they're getting for it:
http://blog.xero.com/2013/11/purchase-orders/
If you need an accounting-only solution, Xero is not a great offer.
No other new entrant has had comparable resources to create the breadth of platform that Xero has already delivered.
While you have to bolt on even the most basic accounting features to Xero and pay a lot for third-party add-ons, you can get an excellent integrated solution from Jcurve if you need more than accouting:
http://www.jcurvesolutions.com/Products/JCurve-PRO
For loss-making Xero to have 230 million in the bank is good. But Intuit's 1 billion dollar net profit per year should qualify as comparable resource. And there are of course MYOB, Reckon, Saasu, Jcurve Netsuite, Kashoo and many others. So it's very hard to see how they are ahead of the pack.
12. EVENTS AFTER THE BALANCE DATE
On 14 October 2013, Xero Limited raised $180 million of new capital at the price of $18.15 per share by issuing 9.92 million ordinary shares.
There were no other significant events after balance date.
Some would consider changes the price structure that hint at poor uptake in the US and have disgruntled many in Australia a significant event.
Subscriber only content on NBR this morning. Headline: Analyst slaps sell rating on XRO
Anyone here a subscriber and preapred to cut and paste the content ?
Also has anyone talked about the Forsyth Barr valuation of just on $20 on this thread before or is everyone overlooking that, perhaps somewhat convieniently ?
Some thoughts on what need to come together so your company deserves to be in the 10x revenue club:
http://abovethecrowd.com/2011/05/24/...-revenue-club/
Does Xero tick #1, #2, #3, #4, #8, #9 and the points mentioned at the bottom of the page? Keep in mind, we're not in the 10x club, we're already in the >60x club.
Analyst slaps ‘sell’ rating on Xero, but sees two intriguing trends
The two major NZ brokerages covering Xero are maintaining their polar opposite ratings following yesterday’s result.
The cloud accounting software company’s half-year net loss widened to $17.1 million, or 14 cents per share, in the six months ended Sept 30, from $7 million, or 7 cents, a year earlier.
The company had already reported an 89% annual gain in paying customers to 211,300 (in an Oct 4 NXZ filing) and a 84% gain in first-half sales to $30.3 million. It says it expects annual revenue to exceed 80% growth and bigger operating losses in the second half of the year.
Little wrong, but not $5b worth of right
Forsyth Barr downgraded Xero from hold to sell last week, almost wholly on valuation.
“While Xero is doing little wrong, we believe its share price is not offering investors good value at current levels,” analyst Andrew Harvey-Green says.
After the half-year loss reported yesterday (after market close), Mr Harvey-Green has reiterated the sell rating but trims Xero’s 12-month price-target by 30c to $22.00 (Xero shares [NZX:XRO] closed yesterday at $35.66 for a $4.57 billion market cap).
First NZ Capital has not issued a note since Xero’s results announcement but analyst James Schofield told NBR ONLINE this morning his rating remains buy, with a $45.70 price target.
Xero is seen on track to meet First NZ’s expectation of $35.7 million full-year adjusted loss.
ForBarr sees a full-year ebitda loss of $34.3 million (a $6 million increase from its previous estimate) and a full year net-loss of $40.4 million.
While the two brokerages' estimates are not that far apart, ForBarr says investors aren’t being adequately compensated for risk, while First NZ has modelled seven shareprice scenarios based on different outcomes in the key US market and sees an overall probability of success.
A Nasdaq listing down the line is also seen boosting Xero’s value.
Two intriguing trends
While ForBarr is put off by Xero’s $4.5 billion, Mr Harvey-Green sees two intriguing trends.
One is that the company – which has hitherto relied on social media, media exposure, word-of-mouth and lobbying accountants to win customers – has launched its first traditional advertising in Australia. The marketing is aimed at winning small business customers, Mr Harvey-Green says (where a recent decision to raise pricing sparked a backlash and was quickly reversed). He’s watching to see if the approach spreads to other markets.
Two, while costs spiralled in Australia and the US, where Xero is pushing hard for market share, in New Zealand revenue grew $1.7 millon while operating costs fell $0.5 million. The net effect was operating costs per customer fell from $93/customer in the first-half of 2013 to $70/customer in the first half of 2014, while ebitda margin lifted from 34% to 49%.
“This result provides an indication of the operating leverage inherent in the Xero business model once it stops investing for growth,” Mr Harvey Green says.