Xero Limited, together with its subsidiaries, provides platform for online accounting and business services to small businesses and their advisors worldwide. More info.
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (NZD, Millions)||NZ$-41.20||NZ$28.00||NZ$28.33||NZ$25.00||NZ$27.00|
|Source||Analyst x3||Analyst x1||Analyst x2||Analyst x1||Analyst x1|
Discounted (@ 9.98%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = NZ$27 × (1 + 2.76%) ÷ (9.98% – 2.76%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
NZ$280 = NZ$41 + NZ$239
Value = Total value / Shares Outstanding (NZ$280 / 137)Discount to Share Price
Value per share (NZD): NZ$2.04Exchange rate NZD/AUD = 0.938
Value per share (AUD): A$1.91
Current discount (share price of A$35.25): -1744.24%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 9.98% = 2.76% + (0.997 * 7.24%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (A$4,737,921,949).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.997 = 0.996 (1 + (1- 28%) (0.07%))
Levered Beta used in calculation = 0.997
Mr. Rod Drury, BCA, HFNZCS is a Co-Founder of Xero Limited and serves as its Chief Executive Officer and Executive Director. Mr. Drury Co-Founded Context Connect, LLC in 2000 and serves as its Chief Technology Officer. Mr. Drury served as Chief Executive Officer of Aftermail Limited. He serves as Chairman of PlanHQ Ltd. Mr. Drury serves as an Independent Director of Xero Live Limited (UK), Xero Live Pty Limited (Australia) and Xero Trustee Limited. He serves as a Director of Pacific Fibre Limited. He serves as a Member of Technical Advisory Board at 2 Ignite Fund. He served as an Independent Director at NZX Limited from November 18, 2009 to May 3, 2013. He served as a Director of Context Connect, LLC. Mr. Drury is the winner of NZX Entrepreneur of the Year Award. He holds a Bachelor of Commerce and Administration (BCA) from Victoria University, majoring in Accounting.
Average tenure of the Xero management team in years:
Average tenure of the Xero board of directors in years:
Tech analysts are forecasting for the entire software tech industry, a strong double-digit growth of 15.35% in the upcoming year , and a whopping growth of 71.40% over the next couple of years. … ASX:XRO PE PEG Gauge Mar 16th 18 The software tech industry is trading at a PE ratio of 31.83x, higher than the rest of the Australian stock market PE of 17.63x. … If Xero has been on your watchlist for a while, now may be the time to enter into the stock, if you like its growth prospects and are not highly concentrated in the tech industry.Simply Wall St - – Full article
Xero Limited (ASX:XRO), a software company based in New Zealand, saw a significant share price rise of over 20% in the past couple of months on the ASX. … Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. … XRO’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value.Simply Wall St - – Full article
Many investors are wondering the rate at which XRO will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for XRO. … What rate will XRO have to grow year-on-year in order to breakeven on this date? … ASX:XRO Past Future Earnings Feb 28th 18 I’m not going to go through company-specific developments for XRO given that this is a high-level summary, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.Simply Wall St - – Full article
View our latest analysis for Xero How does XRO’s operating cash flow stack up against its debt? … With this ramp up in debt, the current cash and short-term investment levels stands at NZ$113.70M for investing into the business. … Next Steps: Although XRO’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings.Simply Wall St - – Full article
In this article, I will take a look at Xero Limited's (ASX:XRO) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, along with how the rest of XRO's industry performed. … For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. … Each year, for the last five years Xero's top-line has risen by 42.57% on average, indicating that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses.Simply Wall St - – Full article
Xero Limited, together with its subsidiaries, provides platform for online accounting and business services to small businesses and their advisors worldwide. It offers Xero, an online or cloud-based accounting software that automates various manual processes. The company offers accountant/bookkeeper tools, such as Xero HQ, Xero Practice Manager, Xero Workpapers, and Xero Cashbook/Ledger; and Xero mobile app. It serves various businesses, such as retail, high tech, non-profit, legal, hospitality, cafés, startups, construction, creatives, e-commerce, and small business. Xero Limited was founded in 2006 and is headquartered in Wellington, New Zealand.
19-23 Taranaki Street,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|ASX||XRO||Ordinary Shares||Australian Securities Exchange||AU||AUD||05. Jun 2007|
|OTCPK||XROL.F||Ordinary Shares||Pink Sheets LLC||US||USD||05. Jun 2007|
|DB||0XE||Ordinary Shares||Deutsche Boerse AG||DE||EUR||05. Jun 2007|
|CHIA||XRO||Ordinary Shares||Chi-X Australia||AU||AUD||05. Jun 2007|
|Company Analysis updated:||2018/03/20 10:32|
|Last estimates confirmation:||2018/03/18|
|Last earnings update:||2017/09/30|
|Last annual earnings update:||2017/03/31|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
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.