Xero boss Rod Drury is disappointed with the sell recommendation Craigs Investment Partners has slapped on the company's stock and he says some financial analysts are overestimating the strength of the Kiwi firm's main competitor in the United States, Nasdaq-listed Intuit.
Initiating coverage this week, Craigs said Xero's current valuation was pricing in "a more rapid take-off in US growth than we think is likely".
The brokerage has put a 12-month target price of $18.90 on Xero shares, which closed down 14c yesterday at $23.51, 47.7 per cent below the $44.98 record high they hit in March.
"We're a bit disappointed with [Craigs'] assessment," Drury says.
He reckons US-based analysts at Deutsche Bank, which holds a 49.9 per cent stake in the New Zealand brokerage, had some input into the Xero report which was authored by Stephen Ridgewell and Joshua Dale, who are both members of Craigs' Auckland-based research team.
US analysts, who have been covering Intuit for many years, have a tendency to overrate the California-based firm's hold on the US accounting software market, Drury says.
"What we've got to do in the US is prove that we can beat Intuit and our track record is very good - we've beaten them in New Zealand, Australia and the UK."
Xero estimates it has a potential customer base of 29 million small and medium-sized businesses in the US.
At March 31 the company had 18,000 US clients, a roughly 1 per cent share of the country's small business market.
Mark Lister, Craigs' head of private wealth research, says it is common for analysts to talk to overseas-based colleagues - who cover similar stocks - in the course of their research but the Xero report is "our analysts' view".
"CEOs should focus on running and growing their businesses, rather than worrying about analyst recommendations and reports," Lister adds.
First NZ Capital has an outperform recommendation on Xero, while Forsyth Barr has an underperform rating on the stock.
National may still be way ahead in the polls, but the outcome of next month's general election has become a little less certain following the release of Nicky Hager's Dirty Politics, which reveals questionable links between the Government and right-wing bloggers.
But the sharemarket - which is banking on a victory by the incumbents come September 20 - has shrugged off the political fallout, the NZX50 gaining 2 per cent between the book's release on August 13 and midday yesterday.
Labour and the Greens have threatened to introduce tough new regulations for the electricity companies if they take power, and listed companies in that sector would be hardest hit by an Opposition win, or by rising fears before the election that a change of government could occur.
Meridian Energy, Mighty River Power and Contact Energy reported solid full-year results this week, the former two companies beating their initial public offering prospectus forecasts.
The share price reaction to the results, however, has been relatively muted and there have been suggestions in the market that an increasingly uncertain political landscape could be keeping a lid on those stocks.
Craigs Investment Partners last month forecast an average decline of 17 per cent across the electricity stocks in the event of a win by Opposition parties.
NEW BANKING BOSS
Sam Ricketts has taken over as First NZ Capital's head of investment banking, filling the position vacated by Rob Hamilton who will become chief financial officer at casino and hotel operator SkyCity in October.
Ricketts joined First NZ in 2006 after six years in Sydney with Caliburn, an investment bank that was acquired by New York-listed Greenhill & Co in 2010.
During his time with the New Zealand company he has advised on a range of debt and equity offerings for listed firms, including Fletcher Building and Nuplex.
He has also worked closely with Canterbury dairy processor Synlait, which floated on the NZX last year.
Transport software firm Eroad is negotiating with authorities in the US states of Washington and California as it pushes for growth following its successful NZX main board listing a week ago.
The Auckland-based company, whose technology is used by transport firms for managing and paying road user charges and tracking fleets, began commercial operations in the Pacific Northwest state of Oregon in April.
"We're already in discussions with California -- which as you know is a global economy in its own right -- and we've initiated conversations with Washington as well," Eroad founder Brian Michie told Stock Takes at the event held to celebrate the listing last week.
"Our target will be firstly the neighbouring states."
So when might the company, which also operates in New Zealand, get commercial activities going in Washington and California?
That's a bit unclear, after Eroad chief executive Steven Newman stepped in at that point in the conversation to rein in the firm's founder.
"Brian, we have to keep on prospectus," Newman pointed out. "You can't go past that or else we're in trouble."
This whole being a listed company thing takes a bit of getting used to.
Eroad shares closed down 3c yesterday at $3.67, 22.3 per cent above the $3 initial public offering price.
The listing, which valued the company at $180 million, raised $40 million in new capital.
END OF THE LINE
Renaissance Corporation, whose shares floated on the NZX way back in 1968, will delist from the exchange next Friday after shareholders agreed to liquidate the firm and return the capital to investors.
The company sold off its remaining businesses - the Yoobee Apple computer retailing chain and Yoobee School of Design - earlier this year and had net assets of $7.2 million at the time of its April annual meeting.
Shareholders have been told to expect a tax-free distribution of 16.6c per share, with 13c per share to be paid within six weeks of the appointment of liquidators and the balance to be paid out once the liquidation is finalised.
Renaissance suffered a major blow in 2008 when it lost its exclusive New Zealand distribution rights for Apple products.