Consensus community valuation
$119.01
Average Intrinsic Value
0.6%
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#Bull Case
Last edited 3 days ago

Probably not a bad long term entry around $116~, in the future it's hard to imagine this not being much higher. Looking at the markets now I see a lot of opportunity to actually build a quality core portfolio on the ASX. Stocks like APX,XRO,ALU,CSL are all on quite large discounts if you ask me and people will probably look back on these prices wishing they bought more.

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#S&P ASX50 Index Inclusion
Added 2 months ago

From December 21, 2020, XRO will enter the S&P ASX50 index, as will Afterpay (APT).  OSH & VCX are the two stocks moving out to make room for XRO and APT in the ASX50.

APT is also entering the ASX20 index (replacing IAG), which is a MAJOR milestone!  

Other index inclusions and removals:

ASX100:  In: IEL, MIN, REH.  Out: ILU, FLT, NHF.

ASX200:  In: KGN, REH.   Out: AVH, COE, WSA

ASX All Technology Index:  In: 3DP, 4DX, BID, DTC, FDV, FZO, HTG, LBY, MMM, OTW, TNT, WBT, YOJ.  Out: RAP.

All of these changes will occur prior to trading on Monday December 21st, 2020.  See here.

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#FY20 Annual Results
Last edited 10 months ago

14-May-2020:  Market Release - FY20 Annual Results   and   Investor Presentation - FY20 Annual Results   

and   2020 Annual Report   and   Appendix 4E - FY20 Annual Results   and   2020 Appendix 4G

Xero Delivers 30% Revenue Growth & Free Cash Flow Progress

Focus is on supporting Xero customers during COVID-19

WELLINGTON, 14 May 2020 - Xero Limited (ASX: XRO) today reports full year earnings to 31 March 2020 (FY20) delivering top-line growth with a positive free cash flow and net profit outcome.  

The effect of COVID-19 on the global business environment, and associated social distancing measures that commenced in March, fell late in FY20 and had a relatively modest impact on Xero’s operating and financial  performance for the year.  

However, the impact of COVID-19 on March trading did result in some reduction in annualised monthly recurring revenue (AMRR) progress in that month. This outcome, along with the ongoing COVID-19 environment, will be reflected in Xero’s FY21 financial performance. Xero does not anticipate significant changes to its long-term strategy, and it believes strongly in the value Xero can bring to small businesses and their advisors.  

Performance highlights FY20  (All figures in NZD as at 31 March 2020. Comparisons are made against FY19)  

  • 30% growth in operating revenue to $718.2 million (29% in constant currency (CC))  
  • 29% growth in AMRR to $820.6 million  
  • 26% growth in total subscribers to 2.285 million  
  • Rest of World and North America contributed almost one in four subscriber additions in H2 FY20  
  • Total subscriber lifetime value grew by 27% (25% in CC) to $5.5 billion  
  • Free cash flow was $27.1 million, taking total available liquid resources to $686.1 million  
  • Net profit of $3.3 million, an improvement of $30.5 million over a net loss of $27.1 million  
  • EBITDA of $137.7 million, an improvement of 88% compared to $73.2 million  

...click on links above for more...

The market seems a little underwhelmed so far with these numbers.  XRO is down a little more than the general market is today - so far.  Xero still looks like a good long term hold to me, although I don't currently hold XRO shares.  It's a very good company and they've only just become profitable with this result (on a full year basis) so plenty of growth to come yet.

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#Fund Manager Views
Last edited 10 months ago

25-Apr-2020:  https://www.livewiremarkets.com/wires/buy-hold-sell-5-pandemic-resistant-growth-stocks

Michelle Lopez from Aberdeen Standard Investments picked XRO as her stock that is pandemic resistant and whose earnings runway has now got even longer, and Ben Rundle from NAOS agreed with her.  The Xero (XRO) commentary starts around the 5:45 mark.

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