James Smalley, an investment adviser, at Hamilton Hindin Greene, said Xero's previous meteoric rise was more about the market getting carried away with itself in 2014 on the back of a mini-tech boom.
But the recent share price growth of Xero showed its shares were now tracking more in line with what the company was doing.
Smalley said Xero's shares had gone up from around $20 a share in April booking a 50 per cent gain for investors over just six months.
Xero this week announced it had passed 250,000 subscribers in the United Kingdom and is now employing more than 200 staff in the UK alone.
The cloud accounting software business is expected to announce a maiden profit in the next year which could be another boon for its share price.
Xero's shares closed up 88c yesterday, up 54.4 per cent over the past 12 months.
PETROL PRESSURE
Z Energy's share price has been drifting downwards in recent months as regulatory uncertainty weighs on the stock.
Smalley said since the government released a report on the fuel industry on July 4, the stock had fallen from $7.89 and was now trading around $7.23.
Energy minister Judith Collins has asked government officials to assess the recommendations of the study and report back to her by November.
The government is also proposing to change the Commerce Act which would allow it to direct the Commerce Commission to undertake market studies.
That would open up the option for it to direct the commission to undertake a further competition-specific fuel market study.
Smalley said Z's situation was similar to what happened to Chorus' shares when it was under scrutiny from the Commerce Commission.
"A regulator looking at a business isn't a good thing."
Smalley said some investors appeared to be selling up.
If fuel margins are squeezed down by the regulator it could result in a re-rating of the value of the stock, he warned.
But Z Energy appears confident it can weather any closer scrutiny of the sector.
Chief executive Mike Bennetts said in a recent update that Z was confident it could demonstrate that the New Zealand downstream fuels industry was highly competitive, with low barriers to entry and that returns were fair and reasonable.
He said Z would submit to the Ministry for Business, Innovation and Employment on their Fuel Market Performance Study by next Friday (October 13).
Z is due to report its half year result to the market on November 9 and has said the recent fuel pipeline crisis wouldn't change its previous earnings guidance of between $445m and $475m for annual replacement cost operation earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf).
Z's shares closed on $7.20 yesterday.
NO ACTION
An investor who complained to the NZX about Refining NZ telling energy minister Judith Collins about its burst pipeline before telling its shareholders has been told the NZX won't be taking any regulatory action.
The pipeline breakage was discovered on Thursday September 14 but Refining NZ didn't make a statement to the sharemarket until the Monday after.
Listed companies are required to disclose material information to shareholders as soon as possible.
In a letter NZX compliance team leader Megan Blenkarne said it had considered whether Refining NZ was in possession of any material information prior to its market announcement on 18 September 2017 that it was required to disclose.
"We are satisfied, based on our enquiries, that no regulatory action is required in this instance."
Blenkarne said although Refining NZ was aware of the leak and had discussed it with the minister prior to the announcement the company said its initial view was that the pipeline repair could be done within two days.
She said disclosure of information to the minister may be required, or recommended, for a variety of reasons, but that information may not have to be announced to the market.
Refining NZ's shares have bounced back to where they were before the pipeline burst and yesterday closed on $2.55, down a cent.
