Executive Summary
Xero Limited, together with its subsidiaries, operates as a software as a service company worldwide. More Details
Rewards
Risk Analysis
Snowflake Analysis
Solid track record with reasonable growth potential.
Similar Companies
Share Price & News
How has Xero's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: XRO is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: XRO's weekly volatility (5%) has been stable over the past year.
Market Performance
7 Day Return
-6.2%
XRO
-1.7%
AU Software
0.1%
AU Market
1 Year Return
56.3%
XRO
20.7%
AU Software
-1.6%
AU Market
Return vs Industry: XRO exceeded the Australian Software industry which returned 20.7% over the past year.
Return vs Market: XRO exceeded the Australian Market which returned -1.6% over the past year.
Shareholder returns
| XRO | Industry | Market | |
|---|---|---|---|
| 7 Day | -6.2% | -1.7% | 0.1% |
| 30 Day | -11.2% | -3.9% | 2.3% |
| 90 Day | 16.8% | 2.5% | 9.8% |
| 1 Year | 56.3%56.3% | 21.6%20.7% | 1.7%-1.6% |
| 3 Year | 346.7%346.7% | 97.1%90.6% | 25.7%10.1% |
| 5 Year | 776.1%776.1% | 168.1%164.7% | 70.7%37.2% |
Long-Term Price Volatility Vs. Market
How volatile is Xero's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 week ago | Simply Wall St
These 4 Measures Indicate That Xero (ASX:XRO) Is Using Debt Safely3 weeks ago | Simply Wall St
What We Make Of Xero's (ASX:XRO) Returns On Capital1 month ago | Simply Wall St
This Insider Has Just Sold Shares In Xero Limited (ASX:XRO)Valuation
Is Xero undervalued compared to its fair value and its price relative to the market?
559.32x
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: XRO (A$133.78) is trading above our estimate of fair value (A$33.77)
Significantly Below Fair Value: XRO is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: XRO is poor value based on its PE Ratio (559.3x) compared to the AU Software industry average (33.2x).
PE vs Market: XRO is poor value based on its PE Ratio (559.3x) compared to the Australian market (22.4x).
Price to Earnings Growth Ratio
PEG Ratio: XRO is poor value based on its PEG Ratio (14.1x)
Price to Book Ratio
PB vs Industry: XRO is overvalued based on its PB Ratio (39.6x) compared to the AU Software industry average (5.2x).
Next Steps
Future Growth
How is Xero forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?
39.7%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: XRO's forecast earnings growth (39.7% per year) is above the savings rate (2%).
Earnings vs Market: XRO's earnings (39.7% per year) are forecast to grow faster than the Australian market (17.9% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: XRO's revenue (18.5% per year) is forecast to grow faster than the Australian market (5% per year).
High Growth Revenue: XRO's revenue (18.5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: XRO's Return on Equity is forecast to be low in 3 years time (18.7%).
Next Steps
Past Performance
How has Xero performed over the past 5 years?
54.1%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: XRO has high quality earnings.
Growing Profit Margin: XRO's current net profit margins (4.6%) are higher than last year (0.4%).
Past Earnings Growth Analysis
Earnings Trend: XRO has become profitable over the past 5 years, growing earnings by 54.1% per year.
Accelerating Growth: XRO's earnings growth over the past year (1219.9%) exceeds its 5-year average (54.1% per year).
Earnings vs Industry: XRO earnings growth over the past year (1219.9%) exceeded the Software industry 20.2%.
Return on Equity
High ROE: XRO's Return on Equity (7.1%) is considered low.
Next Steps
Financial Health
How is Xero's financial position?
Financial Position Analysis
Short Term Liabilities: XRO's short term assets (NZ$939.1M) exceed its short term liabilities (NZ$107.0M).
Long Term Liabilities: XRO's short term assets (NZ$939.1M) exceed its long term liabilities (NZ$813.2M).
Debt to Equity History and Analysis
Debt Level: XRO's debt to equity ratio (76.7%) is considered high.
Reducing Debt: Insufficient data to determine if XRO's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: XRO's debt is well covered by operating cash flow (56.2%).
Interest Coverage: XRO's interest payments on its debt are well covered by EBIT (3.1x coverage).
Balance Sheet
Next Steps
Dividend
What is Xero current dividend yield, its reliability and sustainability?
0.012%
Forecast Dividend Yield
Dividend Yield vs Market
Notable Dividend: Unable to evaluate XRO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate XRO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if XRO's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if XRO's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of XRO's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
2.5yrs
Average management tenure
CEO
Steve Vamos (62 yo)
2.75yrs
Tenure
NZ$1,961,000
Compensation
Mr. Steven M. Vamos, also known as Steve, BEng Civil (Hons) is the Chief Executive Officer of Xero Ltd since April 1, 2018. Mr. Vamos was an Independent Non-Executive Director at Telstra Corporation Limite...
CEO Compensation Analysis
Compensation vs Market: Steve's total compensation ($USD1.41M) is below average for companies of similar size in the Australian market ($USD3.58M).
Compensation vs Earnings: Steve's compensation has increased by more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chief Executive Officer | 2.75yrs | NZ$1.96m | 0.0072% NZ$ 1.4m | |
| Founder & Non-Executive Director | 14.5yrs | NZ$138.00k | 8.14% NZ$ 1.6b | |
| Chief Financial Officer | 2.25yrs | NZ$1.88m | 0.0097% NZ$ 1.9m | |
| Chief Technology Officer | 3yrs | no data | no data | |
| Head of Investor Relations | no data | no data | no data | |
| Chief Legal Officer & Company Secretary | 4.25yrs | no data | no data | |
| Chief Strategy & Corporate Development Officer | no data | no data | no data | |
| Chief People Officer | 1.25yrs | no data | no data | |
| Managing Director of United Kingdom & EMEA | 11.5yrs | no data | no data | |
| Chief Product Officer | 2.33yrs | no data | no data | |
| Chief Customer Officer | 1.25yrs | no data | no data | |
| Managing Director of Australia & Asia | no data | no data | no data |
2.5yrs
Average Tenure
Experienced Management: XRO's management team is considered experienced (2.5 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Founder & Non-Executive Director | 14.5yrs | NZ$138.00k | 8.14% NZ$ 1.6b | |
| Independent Non-Executive Chairman | 0.92yr | NZ$143.00k | 0.0058% NZ$ 1.1m | |
| Non-Executive Director | 11.67yrs | NZ$138.00k | 4.56% NZ$ 907.0m | |
| Independent Non-Executive Director | 0.25yr | no data | no data | |
| Independent Non-Executive Director | 0.75yr | no data | 0.0017% NZ$ 340.0k | |
| Independent Non-Executive Director | 2.75yrs | NZ$138.00k | 0.00065% NZ$ 129.2k | |
| Independent Non-Executive Director | 3.92yrs | NZ$160.00k | 0.0023% NZ$ 453.3k | |
| Independent Non-Executive Director | 6.75yrs | NZ$167.00k | 0.0037% NZ$ 729.7k |
3.3yrs
Average Tenure
Experienced Board: XRO's board of directors are considered experienced (3.3 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: XRO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.8%.
Top Shareholders
Company Information
Xero Limited's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Xero Limited
- Ticker: XRO
- Exchange: ASX
- Founded: 2006
- Industry: Application Software
- Sector: Software
- Market Cap: AU$19.882b
- Shares outstanding: 146.34m
- Website: https://www.xero.com
Number of Employees
Location
- Xero Limited
- XERO ONE
- 19-23 Taranaki Street
- Wellington
- 6011
- New Zealand
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| XROL.F | OTCPK (Pink Sheets LLC) | Yes | Ordinary Shares | US | USD | Jun 2007 |
| XRO | ASX (Australian Securities Exchange) | Yes | Ordinary Shares | AU | AUD | Jun 2007 |
| XRO | CHIA (Chi-X Australia) | Yes | Ordinary Shares | AU | AUD | Jun 2007 |
| 0XE | DB (Deutsche Boerse AG) | Yes | Ordinary Shares | DE | EUR | Jun 2007 |
Biography
Xero Limited, together with its subsidiaries, operates as a software as a service company worldwide. The company offers Xero, a cloud-based accounting software that connects small businesses to their advis...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/01/15 07:08 |
| End of Day Share Price | 2021/01/15 00:00 |
| Earnings | 2020/09/30 |
| Annual Earnings | 2020/03/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.