The Xero Limited (ASX: XRO) share price, like basically all other ASX shares, was hit during the early phase of the coronavirus pandemic. However, unlike some other Australian tech shares such WiseTech Global Ltd (ASX: WTC) and Altium Limited (ASX: ALU), it has since regained nearly all of those share price losses.

Over the past 12 months, the Xero share price has risen from $59.09 to now be trading $88.36. The upward trajectory in the Xero share price began in early 2017 when it was below $20. Since then Xero shares have really taken off.

Xero delivered strong recent financial results for the FY 2020 financial year. However, it did warn of uncertainty regarding the impact of the coronavirus pandemic.

So, are Xero shares an attractive buy right now?

Strong recent financial performance

Xero managed to deliver another very strong set of numbers for the 12 months ending 31 March 2020. Revenue increased by 30% to NZ$718.2 million, driven by a 2% increase in average revenue per user. Overall subscribers also grew strongly. They increased by 26% to reach 2.285 million.

Equally important was that Xero’s gross margin market continues to increase. It expanded by 1.6% to a very appealing 85.2%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew strongly by 52% to reach NZ$139.17 million. Xero also managed to achieve a full-year net profit for the first time in its history.

All regions grew strongly. This includes its main Australian, UK, North American operations as well as other regions including Singapore, Malaysia and South Africa.

Xero is also fast gaining industry recognition. For example, it was recently recognized as a leader in technology research by IDC’s Vendor Assessment study for 2020. The study covered vendors in the worldwide SaaS and Cloud-Enabled Small Business Finance and Accounting applications markets for 2020.

Are Xero shares a good long-term buy?

The impact of the coronavirus pandemic on Xero up to the end of March seemed modest. However, Xero is yet to update the market on its more recent performance. While there is likely to be some recent impact, more favourable market conditions are looking more likely in the months ahead. Business confidence in Australia and New Zealand is now improving. This should see Xero’s growth getting back to more normal levels.

Despite its share price no longer being ‘technically’ cheap, I believe that Xero still has a significant potential to grow further over the next decade. I, therefore, think it is worthy of adding to your share portfolio. In particular, Xero is moving beyond just being a cloud accounting platform. Small businesses are now turning towards Xero to manage their entire business, not just their finances.

More reading

• This is why the Altium share price could be a buy right now
• How to become wealthy by investing $1,000 into ASX shares
• 3 ASX shares to buy and hold for the next decade
• Coles shares and 2 other ASX 200 companies to buy in the current market
• Is the Altium share price the steal of the century?

Phil Harpur owns shares of Altium, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, WiseTech Global, and Xero. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re currently in the process of building a retirement portfolio, then you might want to take a look at the shares listed below.

I believe they are great options for investors looking for a combination of growth and income. They are as follows:

Coles Group Ltd (ASX: COL)

The first share I would consider for a retirement portfolio is Coles. I think the supermarket giant would be a great fit due to its defensive earnings, strong market position, and its refreshed strategy. This strategy is aiming to deliver $1 billion in cumulative savings by FY 2023 through efficiencies and the use of automation. Combined with expansions and its long track record of same store sales growth, I expect Coles to deliver solid earnings and dividend growth over the next decade.

Ramsay Health Care Limited (ASX: RHC)

I think Ramsay Health Care would be a good option for a retirement portfolio. While I expect its growth over the short term to be challenging, I believe its long term outlook is very positive. This is due to its world class network of private hospitals and their exposure to the growing demand for healthcare services. In addition to this, Ramsay has a penchant for making earnings accretive acquisitions and I wouldn’t be surprised if it were lining up more at present. Overall, I believe it can deliver strong total returns for investors over the long term.

Rural Funds Group (ASX: RFF)

Another option to consider is this real estate investment trust (REIT). It has a focus on agricultural assets and owns a wide range of properties across several different industries. This includes cattle, wine, and almond production. Given the quality of its assets, its use of rental indexation, and its ultra-long tenancy agreements, I believe the company is well-positioned to deliver solid income growth over the next decade and beyond. This bodes well for its distributions, which management is aiming to grow by at least 4% per annum over the long term. This could make it a top option for a retirement portfolio.

More reading

• 3 exciting small cap ASX healthcare shares to watch
• 2 ASX healthcare shares to buy for long-term growth
• 3 fantastic ASX 200 shares to buy right now
• Coles shares and 2 other ASX 200 companies to buy in the current market
• Ramsay Health Care and 1 other ASX share I would buy for both growth and income

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Altium Limited (ASX: ALU) share price dropped sharply by more than 40% during the initial phase of the coronavirus pandemic from mid-February to mid-March. Since then its share price has regained just over half of those losses.

Altium has continued to perform reasonably well from a business perspective throughout the crisis, despite some short-term challenges.

Is the Altium share price a buy right now?

What is compelling about Altium’s business model?

Altium designs software which enables engineers to produce printed circuit boards for a broad range of electronic devices. These include everything from computers to cars and a growing range of devices that make up the ‘Internet of Things’.

Altium’s software tightly integrates into its customers’ systems and processes. This results in high customer switching costs. It also helps to lift Altium’s pricing power and recurring subscription revenue. In addition, Altium benefits from high product margins and operating leverage.

I feel that all of these factors make Altium an attractive share to invest in.

How has Altium performed recently?

In a May update, Altium informed the market that it may not reach its aspirational goal of US$200 million in total revenue during FY 2020. Altium still anticipates headwinds up to the end of June. Ongoing lockdown restrictions due to COVID-19 are having an impact in particular in the United States and Western Europe.

The company has also recently experienced challenges to sales, particularly at the smaller end of its target market. This includes signs of distress amongst some start-ups and other smaller customers.

However, on a positive note, the wider electronics industry appears to be holding up relatively well during the pandemic. Engineers have been utilising the excess time and capacity due to the slowdown in manufacturing to become more active in prototype designs. This trend is definitely benefiting Altium.

Altium continues to accelerate the rollout of its new Altium 365 cloud platform. It also reported that it remains in a strong financial position with a current cash balance in excess of US$77 million.

Is the Altium share price in the buy zone right now?

With Altium’s share price down significantly from pre-coronavirus levels, I think that this provides investors with a reasonably good buying opportunity. I believe that any further challenges that Altium may face are well factored into its current share price. In fact, I feel that the market may have over-exaggerated Altium’s current issues.

Altium’s long-term growth prospects continue to look attractive. The growing number of smart connected devices is likely to lead to continued demand for Altium’s products over the next decade.

More reading

• Why I think Xero shares are a great long-term buy
• How to become wealthy by investing $1,000 into ASX shares
• 3 ASX shares to buy and hold for the next decade
• Is the Altium share price the steal of the century?
• The most explosive ASX tech shares you can buy today

Phil Harpur owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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