Xero Ltd (XRO) Fair Value & Analysis
Technology · AU · Market cap A$12.7B (≈ $9.2B) · ISIN NZXROE0001S2
What is Xero Ltd really worth?
Below-average quality, and trading another 221% above our fair value of A$24.69.
Strengths
Risks
Fair value as of: Sep 5, 2026
From 26 valuation models · updated today
Share price +11.3% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- The price sits above even our optimistic bull case (A$30.87). The favourable scenario is already priced in.
- Weak quality (42/100) and above fair value at the same time, the margin of safety is missing on both counts.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 5, 2026.
How to read this chart
60‑month range A$61.58 – A$194.21 · fair‑value band A$19.79 – A$30.87 · the A$79.37 price screens above the A$24.69 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Sep 5, 2026.
Analysis
Xero Ltd (XRO) currently trades at A$79.37, while our model-based Fair Value estimate is A$24.69, implying the stock looks roughly 221.4% overvalued today. The Quality Score stands at 42/100 (below-average quality), in the Technology sector. Bull case: the DCF Models group reads highest at a median of A$107.46 per share, and 9 of the 26 models we run sit above the A$79.37 price. Bear case: the Economic Profit group reads lowest at A$15.19, and 17 of the 26 models stay below the price. Evidence for this calculation is medium.
Over the trailing twelve months, Xero Ltd generated revenue of A$2.8B at a net margin of 6.1%. Revenue grew 40.8% year over year. It earns a return on equity of 4.4%. Net debt stands at A$1.3B. Fundamentals as of Sep 5, 2026
Our scenario range runs from A$19.79 (bear case) to A$30.87 (bull case); at A$79.37, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 60% below its 52-week high and 17% above its 52-week low, currently below its 200-day average. For context, the median of 10 Technology peers we cover trades at −38% fair-value upside, at −69%, XRO screens richer than that median.
Fair Value models
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.
All 26 models by family
Widest divergence: DCF Models (A$107.46) versus Dividend Discount (A$1.01). Highest evidence: EPV (74).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Sep 5, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 48 · Market factors (momentum, volatility) 30
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
Xero Limited, together with its subsidiaries, provides online business solutions for small businesses and their advisors in Australia, New Zealand, the United Kingdom, the United States, and internationally. It offers accounting, payroll, payments and other solutions through its Xero platform.
Full company description
Xero Limited, together with its subsidiaries, provides online business solutions for small businesses and their advisors in Australia, New Zealand, the United Kingdom, the United States, and internationally. It offers accounting, payroll, payments and other solutions through its Xero platform. The company also provides Planday, an online employee scheduling software; Hubdoc for bills and receipts; Syft, which creates reports, forecasts, dashboards, and consolidations with AI insights; Melio, a place to pay bills, send invoices, and automate AP/AR workflows; TaxCycle, a tax preparation software for accountants and bookkeepers; and Tickstar, an e-invoicing product. Xero Limited was incorporated in 2006 and is headquartered in Wellington, New Zealand.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2022 – FY2026 · reported fiscal years
Xero Ltd reported revenue of A$3.0B in FY2026 versus A$1.1B in FY2022, a compound +27.6%/yr. Reported net income was A$180M in FY2026.
XRO screens 221% overvalued. Compare with SAP SE →
Earlier news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Xero Stock And 2 AI Software Picks For Long Term Growth
- Xero Announces New AI Innovations for Small Businesses and Accountants at Xerocon US
- Fresha Launches Native Accounting Integrations with Xero and QuickBooks, Setting a New Standard for Financial Infrastructure in Beauty and W
- Wagepoint and Xero deliver connected payroll and accounting experience for Canadian small businesses
Peer Group
Software - Application · 691 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Software - Application median · lower = cheaper
Strength profile in five axes (Snowflake)
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
VALUE 0: the price sits above our fair-value range.
Insider activity: 45/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Software - Application stocks, each showing price versus our Fair Value estimate (as of Sep 5, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| SAP SE SAP | €191.32 | €169.59 | −11% |
| Shopify Inc SHOP | C$209.78 | C$28.76 | −86% |
| Uber Technologies, Inc UBER | $78.82 | $43.66 | −45% |
| Salesforce, Inc CRM | $252.05 | $249.28 | −1% |
| ServiceNow, Inc NOW | $138.43 | $43.73 | −68% |
| Cadence Design Systems, Inc CDNS | $340.39 | $112.57 | −67% |
| Snowflake Inc SNOW | $329.11 | $42.27 | −87% |
| Adobe Inc ADBE | $289.15 | $454.04 | +57% |
| Automatic Data Processing, Inc ADP | $284.68 | $177.51 | −38% |
| Intuit Inc INTU | $348.00 | $363.46 | +4% |
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