XERO FPO NZ reaches key milestone: Is it a bargain?

Rapidly-growing cloud computing accounting software provider, XERO FPO NZ (ASX:XRO), has surpassed 200,000 Australian customers.

| More on:
a woman

Cloud computing accounting software provider, XERO FPO NZ (ASX: XRO), today announced it has surpassed 200,000 Australian customers as it continues on its impressive growth trajectory.

Shares of the New Zealand-based company have been on a volatile ride since it listed on the ASX in late 2012. Its shares soared to almost $42 in early 2014, but have retreated to $23.60 today.

However, Xero’s operational growth has been impressive.

For example, here in Australia, the company has almost doubled its paying customer base since 31 March 2014, when it had 109,000 customers.

Chris Ridd, Xero Australia’s Managing Director said, “We believe we are now truly in the early majority phase of adoption.”

“We expect to see significantly more small businesses upgrade from traditional accounting products in the coming months and years,” Mr Ridd said.

Xero is currently expanding across New Zealand, Australia, the USA and UK.

After a slow start in the huge U.S. market, Xero recently announced the appointment of experienced key management personnel and welcomed a US$100 million cash injection from Silicon Valley-based venture capital firm, Accel Partners.

Motley Fool Pro Investment Analyst, Matt Joass, showed in this article that Xero is already attracting more interest from internet users (according to Google Trends) than key rivals MYOB, Quicken, Quickbooks and Reckon Limited (ASX: RKN) in both Australia and New Zealand.

Moreover, in the New Zealand market, Xero already counts over 26% of all small businesses as customers.

Is it time to buy Xero shares?

Xero has an innovative accounting product which has proven its ability to attract and retain customers in its home country. Although it has not yet posted a profit, it has a strong balance sheet and its bottom line will likely benefit dramatically from ongoing network effects, as the marginal cost per additional customer falls.

In my opinion, at today’s prices, Xero is a worthy higher-risk investment for your share portfolio.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool Contributor Owen Raszkiewicz owns shares of Xero. The Motley Fool owns shares of Xero. You can follow Owen on Twitter @ASXinvest. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policyThis article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.”

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

The share price of ASX infant products retailer Baby Bunting Group Ltd (ASX:BBN) has been a solid performer so far …

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

A new landmark report by the Intergovernmental Panel on Climate Change (IPCC) was released earlier this week. It provided a …

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest …

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back …

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

Online furniture retailer Temple & Webster Group Ltd (ASX: TPW) had a breakout year in 2020, moving from relative obscurity …

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

Shares in ASX healthcare company Polynovo Limited (ASX: PNV) almost doubled in price last year. And, despite a shaky start …

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

Investing in other geographic markets has become a popular way to diversify a portfolio. The risks associated with being exposed …

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp …

Read more »