Xero Limited

ASX:XRO Stock Report

Market Cap: AU$22.5b

Xero Valuation

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

Valuation Score

1/6

Valuation Score 1/6

  • 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$147.65) is trading below our estimate of fair value (A$149.56)

Significantly Below Fair Value: XRO is trading below fair value, but not by a significant amount.

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/Revenue14.3x
Enterprise Value/EBITDA90.3x
PEG Ratio5.8x

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 Average90.4x
WTC WiseTech Global
154.6x24.0%AU$40.6b
TNE Technology One
71.8x13.6%AU$7.9b
IRE Iress
89.2x29.6%AU$1.7b
OCL Objective
46x6.3%AU$1.4b
XRO Xero
142.6x24.6%AU$22.5b

Price-To-Earnings vs Peers: XRO is expensive based on its Price-To-Earnings Ratio (142.6x) compared to the peer average (90.4x).

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/a27.4%
 n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a27.4%
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Price-To-Earnings vs Industry: XRO is expensive based on its Price-To-Earnings Ratio (142.6x) compared to the Australian Software industry average (64x).

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 Ratio142.6x
Fair PE Ratio69.5x

Price-To-Earnings vs Fair Ratio: XRO is expensive based on its Price-To-Earnings Ratio (142.6x) compared to the estimated Fair Price-To-Earnings Ratio (69.5x).

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$147.65
AU$156.46
+6.0%
16.3%AU$198.10AU$84.38n/a16
Oct ’25AU$150.20
AU$155.27
+3.4%
16.1%AU$200.09AU$85.23n/a16
Sep ’25AU$142.84
AU$153.24
+7.3%
14.5%AU$184.54AU$86.10n/a16
Aug ’25AU$140.25
AU$149.32
+6.5%
14.6%AU$179.62AU$83.80n/a16
Jul ’25AU$134.70
AU$147.60
+9.6%
15.0%AU$182.40AU$84.11n/a16
Jun ’25AU$135.00
AU$147.57
+9.3%
14.0%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$63.80n/a17
Nov ’24AU$107.06
AU$121.42
+13.4%
18.3%AU$147.86AU$62.67n/a17
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
Nov ’23AU$78.28
AU$95.39
+21.9%
22.1%AU$133.87AU$54.92AU$107.0617
Oct ’23AU$73.51
AU$94.70
+28.8%
26.6%AU$151.54AU$53.21AU$112.4316

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

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