End May Update, page-27

I would say NEA, at least for me right now. Note that I am biased as I have plenty of NEA, none of XRO.

XRO is a much more mature company, but a big company who is still growing very quickly mind you! Huge TAM, highly resilient towards any sort of market jitters - for example with all the SME’s being hit by covid, you can bet that XRO subscription would be the last thing that is turned off.

Investment wise, there isn’t a lot of upside left. They are very, very richly valued. I would say fully valued. You’d be seeing a 10%-20% upside per annum, if everything goes off without a hitch, and growth doesn’t slow down.

NEA is much earlier in the cycle, and has a much higher upside. I see 40-50% growth per annum from these levels, simply because of how undervalued it is right now. A very misunderstood stock at the moment.

Think back in 2013-2014 when XRO jumped from a $10 stock to a $40 stock. That is like NEA jumping from $1 to $4 in 2018-2019.

XRO then crashed to $12 a year after the high in 2015
NEA too crashed to $1.20 a year after the high in 2020

XRO is now $80.

It seems that NEA is bound to reach $8 some time in the future, if they follow in XRO’s footsteps.

But those are fnkin big shoes to fill. XRO is one of Australia/NZ’s best tech success stories, and their product and service changes millions of lives (businesses, sole traders, sole proprietors, trading companies, ranging from your cafe down the road to a bakery in Singapore to a pub in downtown London and all their customers!)

If NEA could provide a service as great and have real impacts to their clients, $8 looks to be on the cards by the time 2024 hits us