Too late for a bite at the accounting software apple

Financial Journalist
Print This Post A A A

As comparisons go, Credit Suisse’s description this month of Xero as “the Apple of accounting” was a beauty. It featured in numerous stories relaying Credit Suisse’s prediction that Xero could become a $10-billion Nasdaq-listed stock within five years.

Seasoned observers might view that comparison as a sign tech stocks are overheating. Few are hotter right now than Xero, capitalised at $3.8 billion, after a six-fold share-price increase this year.

Heady stuff for a loss-making company that does not yet have positive free cash flow, because it is investing heavily for growth. Put another way, Xero is worth 13 times more than highly profitable Reckon, which has a strong position in the Australian accounting software market.

Also from this edition