I'm a bit less bullish on these results. UK subscriber growth is slowing (+17% vs +32% y-o-y), and they are not really making any progress in North America (+18% vs +24% off a very small base). ANZ was impressive, but these are becoming more mature markets with less upside.
Clearly COVID-19 hit the SME base hard, but could also have been a driver for firms to move to cloud accounting. To justify the valuation, XRO has to win in North America. The trends don't look favourable.
These kinds of results were baked into many of the higher valuation. Yesterday, I assessed risk/reward as unfavourable and have exited after holding for 4 years.
If you roll these growth rates forward 5 years, when earnings become material, you get a P/E that is way too high given the continuing growth. (I say this recognising that P/E is not a meaningful metric at this time for XRO.)
Love the company, love the product and would buy again at the right price. Given the macro picture on growth and tech, I'll wait for $110 to re-enter.
GLTAH.
I'm a bit less bullish on these results. UK subscriber growth is...
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Last
$148.72 |
Change
1.230(0.83%) |
Mkt cap ! $22.70B | |||
| Open | High | Low | Value | Volume |
| $147.16 | $149.00 | $147.00 | $26.50M | 178.5K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 390 | $148.65 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $148.72 | 1394 | 1 |
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| Last trade - 16.10pm 27/09/2024 (20 minute delay) ? |
| XRO (ASX) Chart |