It's hard finding comparatives for these type of businesses. The...

It's hard finding comparatives for these type of businesses. The recently floated Veda has some similarities - high margin subscription but high R&D needed. The market loves VED and has given it a 2014 EV/EBITDA multiple of about 17.3x (adjusting for the 39m options). The Bain Capital owned MYOB has subordinated notes listed on ASX (MYB) so we have its financials - the CY13 numbers were released last week. It made EBITDA of $121m on revenue of $247 - margin of 49% - and both were up about 13% or so. Over half of new users are on the cloud products. It is loaded up with debt ($595m net). On a float at say 15x EV/EBITDA (BTW it was privatised at 9x) the EV would be around $2.4billion. So XRO is valued at 2.15x the far bigger competitor who has its new product release in April. MYO has about 1.2million customers in A&NZ so gets about $200/customer pa. XRO at its last disclosure (9/13) has about 164k customers in A&NZ so probably has circa 190-195k now in A&NZ paying around $337pa. . XRO has added about 9,500 customers a month since September - a flattening of the accleration but there are seasonal negatives. To get to the sort of customers needed to justify the current valuation (1.3million or so) assuming 66% EBITDA margins and $350/customer revenue plus 17x EV/EBITDA will take till late 2017 using an extrapolation function with some hellish fading quarterly growth rates (starting at 15%)- to prove it, the boys will need to be adding 16k customers a month by Q3/Q4 of this calendar year.