Xro - xero

[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 - 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...091850000&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 , but never mind the PE and analysts forecasts for FY 2022 ;