Xro - xero

[Xirr]

Sorry did you say stop growing and "demonstrate you can operate at a profit" or "slow down and let the others catch up"? to me they are almost the same.

I think what I'm saying is that there are plenty of companies out there that have demonstrated sales growth equivalent to or higher than Xero (salesforce and facebook being examples) while generating profits. You should at least have a credible story you can tell about how you can get to profits. I am a long time investor in tech companies, and Xero's cost %'s vs sales are way off the charts compared to other successful companies that I have invested in from an early stage in the past.

If you are asking investors to have faith that you will one day operate at a profit, then the market should value you lower than those that were able to demonstrate they were operating at a profit.

That hasnt happened in Xero's case. The market is valuing Xero on higher multiples than Salesforce/Facebook were when they were around $100m-$200m sales. The market is paying too much, in my opinion. The market is ignoring the possibility that Xero will have a significantly higher cost base than comparable SAAS companies at maturity, and will therefore be worth much less. This is my personal view, I like Xero a lot, but I think it has been fundamentally overvalued and its cost base has not been examined with a critical eye. The believers focus only on revenue growth and aren't comparing its % of costs to sales against other comparable companies, which would highlight the issue.

[skid]

Meanwhile -chartwise it is slowly heading towards a ''death cross'' useing the 30-120ma(for company not yet making a profit) so good to keep an eye out for that--(not there yet but..)

[JamesST]

The market is paying too much, in my opinion.

Are you saying that you think Xero's share price is overvalued?

[Baa_Baa]

Meanwhile -chartwise it is slowly heading towards a ''death cross'' useing the 30-120ma(for company not yet making a profit) so good to keep an eye out for that--(not there yet but..)

Using the Simple MA, 30SMA is 20.28 and 120SMA is 20.76 (both rounded up) so as you say the cross is imminent if the SP stays around here or lower, but SP is above the 30SMA now so could be seen by some as a short term breakout.

On my chart using the EMA's however on the same period, the death cross as you put it (most would attribute a death cross to be the 50/200 however, for a pre-profit as you put it also) the 30 EMA crossed down through the 120EMA on 25 May and the closing price today is a smidgen under the 30EMA. Call it overhead resistance if you like, where the 30EMA is a trigger and the 120EMA pulls the trigger. Take into account the horizontal resistance at $20.85-$21.20 as well with a target $23 above, a breakout UP through that would be significant on the charts, regardless of the SMA or EMA.
Attachment 7385
Charts tells you whatever you want them to.

The thing I see is that the Money Flow is positive and rising, RSI pushed up through 50, but the slower indicator the SlowSTO, has yet to cross or rise above 20. Parabolic SAR has been positive since 11 May. Good news would boost the SP. No news will probably see the price rising on sentiment and anticipation of good news. Bad news seems unlikely as the quarterly results are a few weeks away.

Such is XRO, it defies any logic, has no basis in fundamentals and the charts only help with adjusting ones perception of the relative risks of entry or exit.
Attachment 7384
It depends only on what your trading strategy is, and sticking to it.

[Toasty]

http://www.stuff.co.nz/business/smal...business-stats

Just thought I would break into the slagging session to add the above link. Not sure what it means long term but I think its interesting as it shows Xero thinking beyond the basic accounting aspects of their product. We all know they are thinking about the big data approach but its interesting to see it start to manifest itself.

Carry on.

[lubos]

In the Australian Financial Review written by a Deloitte Private partner

http://www.afr.com/technology/why-pr...ghcrid?stb=twt

The closest he can compare anything from Amazon to Xero is a division called "Amazon Web Services" which Amazon runs. This division rents IT infrastructure to companies as a service and it's very profitable. It made $265 million in profits on $1.57 billion revenue last quarter [1]. That's very good news.

Then he mentions Salesforce. In terms of revenue, Xero is today where Salesforce was back in 2005. And in 2005, Salesforce actually made a profit of $7 million on $176 million in revenue [2] (the article claims Salesforce has never made a profit) and since then, Salesforce operating cashflow has been always positive. Last year they made over $1 billion in operating activities for the first time. In other words, comparing cashflow statement of Salesforce [3] vs Xero [4]. It's clear Salesforce losses are being funded by their profit from operations. Xero losses are being funded by investors. Who cares about Salesforce loss on GAAP basis if their net operation cash flow has increased by 33%. Meanwhile Xero loss from operating activities has almost doubled. No wonder both companies are viewed differently by investors.

[1]: http://www.businessinsider.com.au/aw...-profit-2015-4
[2]: http://investor.salesforce.com/files...ual_report.pdf
[3]: http://www.marketwatch.com/investing...ials/cash-flow
[4]: https://www.xero.com/media/7535315/x...eport_2015.pdf

[Everwood]

Xero recently surpassed 500,000 subscribers. This notice appeared on ASX after NZX market was closed, but should appear on NZX tomorrow morning.

http://research.iress.com.au/ids/pds...=01630710&mp=1

[RGR367]

Xero recently surpassed 500,000 subscribers. This notice appeared on ASX after NZX market was closed, but should appear on NZX tomorrow morning .............

Yeah, it's on their blog site now. Thanks.

[Leftfield]

Quite a few Xero press releases to coincide with Xerocon on Denver 3 - 4 June 2015. Announcements include; working with iOS, Vend & Deputy to improve Retail accounting via iPads, iPhones etc; New Business Performance Dashboard, and Payroll capabilities now extended to Colorado. Plus the 500,000 customers. All good progress.

[Bilbo]

Xero recently surpassed 500,000 subscribers.

A little concerned that it took 2 months to get from 475K to 500K customers. That's 25K over 2 months which would be 150K annualised, and no where near the growth needed. I assume they get more users near the beginning of the financial year in each market, so maybe April/May are quiet months other than NZ? Would be interested in people's comments. Have they released forecast growth for FY16?