Accounting software made for small businesses: Xero’s online accounting software lives in the cloud, which allows small business to automate everyday business tasks, update financials, thus allowing businesses to operate from anywhere.
Some of their products include:
- Accepting payments
- Inventory management
- Information security
- Bank reconciliations
- Expense tracking
- Managing tax obligations
The list goes on.
In business and in operating a business, these are all needs.
Xero operates in various countries, with the main areas being Australia, New Zealand and the UK.
Some important fundamentals to consider:
- Current share price = 93.32 AUD (23 July 2020).
- Share price performance year-to-date = +46.25%.
- Revenue increased 30% for the year ending 31 March 2020.
- Subscribers also increased by 25%, reaching 2.285 million.
They have shown growth in all regions they operate in, which include the above locations as well as: North America, Singapore, Malaysia and South Africa.
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In my opinion Xero is a solid company and has shown that over the years. I think global lockdowns and the closure of businesses world-wide will affect them in the short term, but markets are forward thinking.
I like the space they operate in and see its long term potential - especially as their business model allows easy and simplistic scalability. They are also in the business of helping entrepreneurs grow their businesses, which fits in with my personal vision: when you invest in a company, you become part of the company.
Xero’s software makes all of the above-mentioned products simplistic and easy to use, and when you are running a business you need the products they offer. Personally, I know a lot of business owners that have moved the above-mentioned operations from Sage to Xero.
In the short term, I think Xero might be affected by the global economic downturn, so I won’t be surprised if they experience a small pullback.
I am a long-term investor. I don’t care about short term volatility, so I will be buying Xero shares with a long-term perspective because I believe this is a company that will weather the storms.
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Higgo van Biljon
Easy user, Founder & CEO FinMeUp
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