Earnings increasing & multiples expanding (Re-rate commencing), page-1246

"The market realises it" - I think arguing from authority using the market is a mistake. If the market accurately priced everything there would be no volatility/room to make profit.

You've now made a comparison to Xero, which is interesting. Do you know that XRO, founded in 2006 took 5 years to reach revenue of 9 million (2011 FY)? At that time it described itself as a 'small business', much like you are describing CXZ as a 'boutique' business. In comparison, CXZ has reached 8 million in roughly 6 years, though of course, I would never compare the two as their pathway and product is very different.

But seeing as you brought it up.. In the following years XRO pushed huge amounts of money into building its internal structure and into marketing their product and successfully 'scaled' their product. Despite the fact that the market was already saturated with competitors, XRO identified that the incumbents were stagnant and were able to develop a superior product and soon became the lead challenger to pre-existing technologies in the field. Similarities? Well, CXZ has cornered the leading manufacturer in the most profitable region for their market already. We are now at the stage where it is time to market the product, based on an oustanding track record with GM, which is what the company has acknowledged is their next step.

So you can make lofty comparisons and decry that CXZ is no comparison at all to more well-established tech companies such as XRO and other 'market darlings' - you could have done the same with XRO at the time, except for one thing, XRO never had such a strong value proposition - it did not make a net profit for a number of years, and had huge wage costs and considerably more debt early on. I dare say if we rewound the clock to XRO circa 2011 you would say the same thing about that share then - but add that there was "growing debt, significant YOY net losses, and large wage expenses", which fortunately CXZ has none of, so can only be denounced in terms of the fact that it's not a $X billion dollar company.

Cheers,
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