How is Xero actually worth $20 now????
@ $20 the market cap is just over 2.5 billion. The annualized revenue has just exceeded 100 million May 2014. Let just give XERO the benefit of the doubt that they can continue to grow at 80% revenue YOY. That would give XERO a P/S ratio of approx 16.6X. Assuming 80% further on 2016 would yield a P/S ratio of 9.26. At 275 million. The hardest part is projecting when XERO will break even and become profitable. Looking at other cloud competitors in the US, some of them have revenues of 500 million and aren't anywhere near breaking even as they chase further growth... If XERO follows this path how long can they go before they'll need another cap raising?