Xero Limited

ASX:XRO Stock Report

Market Cap: AU$25.4b

Xero Valuation

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

Valuation Score

0/6

Valuation Score 0/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

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$166.27) is trading above our estimate of fair value (A$148.33)

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

Key Valuation Metric

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

Key metric: As XRO is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for XRO. This is calculated by dividing XRO's market cap by their current earnings.
What is XRO's PE Ratio?
PE Ratio130.2x
EarningsNZ$215.65m
Market CapNZ$28.07b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for XRO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average92.8x
WTC WiseTech Global
150.5x24.1%AU$39.6b
TNE Technology One
83.8x16.1%AU$9.9b
OCL Objective
50x6.5%AU$1.6b
IRE Iress
86.8x29.1%AU$1.7b
XRO Xero
130.2x26.6%AU$25.4b

Price-To-Earnings vs Peers: XRO is expensive based on its Price-To-Earnings Ratio (130.2x) compared to the peer average (92.8x).

Price to Earnings Ratio vs Industry

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

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
IRI Integrated Research
3.6x-20.4%US$60.41m
No more companies available in this PE range
XRO 130.2xIndustry Avg. 67.1xNo. of Companies3PE020406080100+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: XRO is expensive based on its Price-To-Earnings Ratio (130.2x) compared to the Australian Software industry average (67.1x).

Price to Earnings Ratio vs Fair Ratio

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

XRO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio130.2x
Fair PE Ratio75x

Price-To-Earnings vs Fair Ratio: XRO is expensive based on its Price-To-Earnings Ratio (130.2x) compared to the estimated Fair Price-To-Earnings Ratio (75x).

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$166.27
AU$186.13
+11.9%
14.5%AU$220.28AU$91.07n/a16
Dec ’25AU$173.85
AU$183.91
+5.8%
14.5%AU$217.65AU$89.99n/a16
Nov ’25AU$148.21
AU$157.91
+6.5%
16.1%AU$199.17AU$84.88n/a16
Oct ’25AU$150.20
AU$155.20
+3.3%
16.1%AU$200.28AU$85.35n/a16
Sep ’25AU$142.84
AU$153.21
+7.3%
14.5%AU$184.54AU$86.22n/a16
Aug ’25AU$140.25
AU$149.30
+6.5%
14.6%AU$179.62AU$83.92n/a16
Jul ’25AU$134.70
AU$147.57
+9.6%
15.0%AU$182.40AU$84.11n/a16
Jun ’25AU$135.00
AU$147.54
+9.3%
13.9%AU$180.41AU$84.95n/a16
May ’25AU$123.18
AU$129.88
+5.4%
17.2%AU$156.04AU$75.80n/a16
Apr ’25AU$133.32
AU$130.21
-2.3%
16.8%AU$156.20AU$76.63n/a16
Mar ’25AU$134.93
AU$124.90
-7.4%
17.8%AU$158.84AU$77.99n/a16
Feb ’25AU$109.38
AU$118.77
+8.6%
14.5%AU$142.15AU$78.63n/a16
Jan ’25AU$112.30
AU$117.64
+4.8%
14.7%AU$141.19AU$78.10n/a16
Dec ’24AU$101.13
AU$115.21
+13.9%
18.5%AU$141.85AU$63.80AU$173.8517
Nov ’24AU$107.06
AU$121.42
+13.4%
18.3%AU$147.86AU$62.67AU$148.2117
Oct ’24AU$112.43
AU$116.37
+3.5%
19.6%AU$145.05AU$62.78AU$150.2017
Sep ’24AU$123.86
AU$115.29
-6.9%
19.0%AU$145.98AU$63.18AU$142.8417
Aug ’24AU$123.88
AU$113.20
-8.6%
18.5%AU$147.06AU$63.65AU$140.2517
Jul ’24AU$118.93
AU$111.72
-6.1%
17.6%AU$132.45AU$63.23AU$134.7017
Jun ’24AU$112.03
AU$108.24
-3.4%
18.1%AU$129.30AU$63.91AU$135.0017
May ’24AU$92.47
AU$98.10
+6.1%
15.7%AU$126.41AU$59.82AU$123.1816
Apr ’24AU$89.42
AU$96.00
+7.4%
14.5%AU$115.98AU$59.87AU$133.3216
Mar ’24AU$77.46
AU$83.13
+7.3%
19.3%AU$120.75AU$54.00AU$134.9316
Feb ’24AU$76.86
AU$83.05
+8.1%
19.3%AU$120.90AU$54.07AU$109.3816
Jan ’24AU$70.27
AU$85.97
+22.3%
20.1%AU$123.63AU$55.63AU$112.3016
Dec ’23AU$74.99
AU$84.22
+12.3%
20.3%AU$122.23AU$55.00AU$101.1317

Analyst Forecast: Target price is less than 20% higher than the current share price.

Discover undervalued companies

7D

1Y

7D

1Y

7D

1Y

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/19 04:21
End of Day Share Price 2024/12/19 00:00
Earnings2024/09/30
Annual Earnings2024/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

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.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Xero Limited is covered by 27 analysts. 16 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Eric ChoiBarrenjoey Markets Pty Limited
Aryan NoroziBarrenjoey Markets Pty Limited
Nicholas McGarrigleBarrenjoey Markets Pty Limited