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Xero bags top slot on Forbes list

A fillip for Xero [NZX: XRO] investors: the company has bagged top slot on a Forbes list of top 100 most innovative growth companies.

Check out the full list here

The Forbes success follows a run of positive press in the key US market, including a top choice ranking in US PC World comparison of online accounting software and a nod in Fortune.

Xero still has a mountain to climb against Intuit, the monolithic, cash-rich and increasingly cloud-savvy North American incumbent, but this all helps.

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Comments and questions

Although Xero a still nowhere near being a success in the US, their accomplishments should be celebrated by New Zealanders no differently to that of Lydia Ko or Steven Adams.

Best that people understand how the companies were ranked. From Forbes:

Companies are ranked by their innovation premium: the difference between their market capitalization and a net present value of cash flows from existing businesses. The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.

So it's a negative if this gap is so high?

It's at the top of a list that measures how bid up shares prices are in excess of current performance. Not the best award IMHO

To me it suggests a level of hype/over-valuation. I mean, its really showing us the difference between the company's market value and its actual underlying profitability. Whether its an innovation or a bubble factor remains to be seen.

70 million revenue 300,000 customers equal only $233 per customer per year
70 million revenue 800 employees $87,000 each salary maybe
when and where will the profit come

Look in the detail of XRO's end of year report. Listed in their top 20 shareholders is a well known US development fund... Blackrock. Theis crowd is serious backing XRO..