Xro - xero

[MPC]

I just sold some (my daughters little long term holding) at $2.99.
Great profit and if it retraces I will look at buying back in. I think also that it has gone a bit too far, too fast. So naturally It will probably gain another dollar now.

Cheers,
MPC

[Stranger_Danger]

I'd be interested at $1.20 but I'm far too cheap so 9/10 times I don't end up owning these sort of stocks.

The pullback is healthy though and I doubt many holders will be worried, it was starting to feel really bubbly.

[gregrday]

Hi Turmeric

good effort on your trades! I have a pretty detailed evaluation of Xero on my blog (along with quite a few comments), check out: http://gregnz.wordpress.com
including a DCF analysis. I value a "everything goes pretty well by 2018" Xero at about $3.75. Is everything going to go well? hmm... ;-)

cheers
Greg

[Nigel]

20% down from recent highs - that's a pretty sizable discount. The stock was probably getting ahead of itself, but looking at the chart it's now back at a reasonable level and ready to resume a steady climb north. Sell depth also thinning - now at 2.68 (only 869 on offer) then up to 2.75. VWAP for today at 2.71, so looks oversold on light volume to me.

[Toulouse - Luzern]

Noted that the Loss for six months exceeds the Revenue:

XERO LIMITED (web site)
Results for Announcement to the Market
Reporting Period
6 months to 30 September 2010
Previous Reporting Period
6 months to 30 September 2009
Amount (000s) Percentage Change
Revenues from Ordinary Activities
$NZ 3,727 193%
Profit / (Loss) from Ordinary Activities after Tax
attributable to Security Holder
$NZ (4,726) 24%

[CJ]

So revenue of $3.7m and expenses of $8.4m. I thought they were meant to be close to break even?

[gregrday]

I think the estimated breakeven point is 4th quarter 2011. So still quite a lot of time to go. Next results and AGM will be very interesting.
:-)
I'd better by some shares back to get an invite!

cheers
Greg

[CJ]

Agree Belgarion but does revenue of $3.7m justify a $200m+ valuation.

[CJ]

On a side note or a bit of history from the .Com boom days if you like ... The theory for companies like XRO is that the expenses should start to reduce once XRO has their "system" finished. However, systems are seldom "finished" and expenses prove stubbornly hard to pull back. We'll see.

they should decrease as a percentage of revenue, not in absolute terms. Remeber hosting costs are proportional.

I did try to get in when I heard that Theil had invested but missed out by 1c and didn't up my bid. Seems stupid now. Missed out at $1.51 but didn't want to buy in at 1.7 I think it was - now it is $2.8???

My concern is that this is going to be a crowded market. Xero definately seems to be the in front in terms of offering for a SAAS but how long before someone else catches up. I dont think peopel are facting in risk into the price.

[Toulouse - Luzern]

Agree Belgarion but does revenue of $3.7m justify a $200m+ valuation.

During the height of the dot com boom with hockey stick valuations and revenue projections one researcher got total employees (including tea ladies and cleaners)and divided it into the valuations. They had a rule of thumb as to how hi was likely to be too high ...