SHL share price in focus
Sonic Healthcare was listed in April 1987. It is now one of the world’s biggest pathology businesses with operations in Australia, New Zealand, Europe and North America.
It offers a number of different services including laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine and corporate medical services.
Sonic Healthcare looks to act in the best interests of its doctors and their patients. It aims to provide medical excellence as well as being a highly desirable place to work.
XRO shares
Founded in 2006 in Wellington, New Zealand, by Rod Drury, Xero has grown into a global leader in cloud-based accounting software. Under Drury’s leadership until 2018 and under a new CEO since, the company has expanded to employ over 3,000 people and now serves millions of subscribers worldwide.
Xero’s “beautiful accounting software” is designed primarily for accountants and bookkeepers, enabling them to better serve small business clients. It offers real-time financial data accessible on any device, empowering small business owners and their advisors with up-to-date insights.
Xero’s core cloud accounting platform is widely used in New Zealand, Australia, the UK, and, to a lesser extent, the United States.
SHL & XRO share price valuation
As a growth company, one way to put a broad estimate on the SHL 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, Sonic Healthcare Ltd shares have a price-sales ratio of 1.43x, compared to its 5-year average of 1.94x, 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 SHL, 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.
The XRO share price currently trades at a price-sales ratio of 14.19x, which compares to its 5-year long-term average of 18.65x. So, XRO shares are trading lower than their historical average. Don’t forget, a simple multiple like this should only be the start of your research. The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! It’s a good idea to use multiple valuation methods to value a share like Xero Ltd.
