We’ve recently updated our valuation analysis.

Xero Valuation

Is XRO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for XRO?

Other financial metrics that can be useful for relative valuation.

XRO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue8.8x
Enterprise Value/EBITDA112.7x
PEG Ration/a

Price to Sales Ratio vs Peers

How does XRO's PS Ratio compare to its peers?

The above table shows the PS ratio for XRO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average14.2x
WTC WiseTech Global
27.1x16.6%AU$17.2b
ALU Altium
14.6x13.7%AU$4.8b
TNE Technology One
12.2x11.5%AU$4.4b
IRE Iress
2.8x5.4%AU$1.8b
XRO Xero
8.8x15.8%AU$10.3b

Price-To-Sales vs Peers: XRO is good value based on its Price-To-Sales Ratio (8.8x) compared to the peer average (14.2x).


Price to Earnings Ratio vs Industry

How does XRO's PE Ratio compare vs other companies in the AU Software Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a32.7%
n/an/an/a

Price-To-Sales vs Industry: XRO is expensive based on its Price-To-Sales Ratio (8.8x) compared to the Australian Software industry average (3.7x)


Price to Sales Ratio vs Fair Ratio

What is XRO's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

XRO PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio8.8x
Fair PS Ratio17.4x

Price-To-Sales vs Fair Ratio: XRO is good value based on its Price-To-Sales Ratio (8.8x) compared to the estimated Fair Price-To-Sales Ratio (17.4x).


Share Price vs Fair Value

What is the Fair Price of XRO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: XRO (A$69.45) is trading above our estimate of fair value (A$33.74)

Significantly Below Fair Value: XRO is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst XRO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$69.45
AU$84.64
+21.9%
20.6%AU$123.72AU$55.68n/a17
Dec ’23AU$74.99
AU$83.71
+11.6%
20.7%AU$122.11AU$54.95n/a17
Nov ’23AU$78.28
AU$95.33
+21.8%
22.1%AU$133.81AU$54.90n/a17
Oct ’23AU$73.51
AU$94.60
+28.7%
26.6%AU$151.37AU$53.14n/a16
Sep ’23AU$85.32
AU$95.06
+11.4%
26.7%AU$153.17AU$53.10n/a16
Aug ’23AU$92.60
AU$97.55
+5.3%
26.3%AU$155.01AU$53.74n/a16
Jul ’23AU$77.01
AU$97.83
+27.0%
24.6%AU$143.81AU$53.90n/a16
Jun ’23AU$87.36
AU$98.39
+12.6%
25.2%AU$144.03AU$53.98n/a15
May ’23AU$96.35
AU$123.00
+27.7%
29.0%AU$201.00AU$48.60n/a13
Apr ’23AU$101.04
AU$123.56
+22.3%
28.8%AU$200.43AU$49.08n/a13
Mar ’23AU$100.32
AU$131.22
+30.8%
28.9%AU$202.89AU$48.29n/a12
Feb ’23AU$113.98
AU$135.46
+18.8%
27.6%AU$203.64AU$48.46n/a12
Jan ’23AU$141.44
AU$136.88
-3.2%
25.5%AU$192.85AU$48.76n/a13
Dec ’22AU$148.74
AU$140.89
-5.3%
24.5%AU$197.73AU$50.00AU$74.9914
Nov ’22AU$155.75
AU$129.49
-16.9%
26.2%AU$188.57AU$49.96AU$78.2814
Oct ’22AU$140.39
AU$130.20
-7.3%
26.1%AU$189.15AU$51.44AU$73.5114
Sep ’22AU$151.50
AU$123.75
-18.3%
26.1%AU$168.18AU$51.60AU$85.3213
Aug ’22AU$140.28
AU$122.31
-12.8%
26.2%AU$165.61AU$50.81AU$92.6013
Jul ’22AU$136.04
AU$119.12
-12.4%
23.8%AU$151.04AU$50.08AU$77.0114
Jun ’22AU$131.62
AU$120.89
-8.2%
22.8%AU$152.72AU$50.63AU$87.3616
May ’22AU$141.56
AU$121.56
-14.1%
25.2%AU$159.54AU$45.95AU$96.3516
Apr ’22AU$130.87
AU$112.80
-13.8%
26.7%AU$155.41AU$45.22AU$101.0415
Mar ’22AU$122.53
AU$110.34
-9.9%
26.1%AU$153.49AU$45.06AU$100.3215
Feb ’22AU$131.41
AU$110.60
-15.8%
25.9%AU$155.68AU$45.71AU$113.9815
Jan ’22AU$146.82
AU$108.75
-25.9%
26.1%AU$157.00AU$46.10AU$141.4415
Dec ’21AU$132.20
AU$105.67
-20.1%
24.9%AU$143.79AU$46.25AU$148.7414

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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