XRO share price in focus
Xero founder Rod Drury started the company in 2006 in Wellington, New Zealand. He led the company until 2018 and remained on the board until 2023. Today, Xero helps millions of people and businesses manage their accounting and tax obligations across the globe.
The cloud-based accounting software developed by Xero is primarily for accountants and bookkeepers to better service their small business customers.
Through Xero, small business owners and their advisors have access to real-time financial data on any device. Xero provides its core cloud accounting software to customers in New Zealand, Australia, the UK and, over the last few years has been working hard to break into the US market.
GMG shares
Founded in 1989, Goodman Group is a leading global property group that owns, develops, and manages real estate assets across multiple continents.
As the largest ASX-listed property group, Goodman operates in key markets including Australia, New Zealand, the UK, Japan, the US, and Brazil.
XRO & GMG share price valuation
As a growth company, one way to put a rough guesstimate on the XRO share price could be to compare its price-to-sales multiple over time. This can tell us how the company has historically been valued relative to its total revenue.
Currently, Xero Ltd shares have a price-sales ratio of 15.25x, compared to its 5-year average of 18.65x, meaning its shares are trading lower than their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of XRO, revenue has been growing over the last 3 years. Of course, context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric, but this can be a rough starting point.
Since GMG is more of a ‘blue chip’ company, we could look at its dividend yield to determine its value. If we compare it to the historical dividend yield, we can get a sense of the stability of the company and its ability to pay out income. GMG is paying a trailing dividend yield of around 1.02%, which compares to its 5-year average of 1.28%. This is just one of many ways you could put a value on GMG shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets which can help you learn how to value a company like XRO or GMG.
