Reviewing Xero Through the Rule of 40
We expect Xero’s near- and medium-term strategic focus to revolve around rationalizing its areas of investment, especially against a backdrop of normalizing demand for business software.
Xero Ltd XRO
Bulls Say, Bears Say
Bulls
Xero holds a dominant market position in Australia and New Zealand, where its business is supported by network effects.
Bears
Xero’s customer base of SMEs is low-quality, due to the segment’s inherently high business failure rates. This will require constant spending into sales and marketing to replenish churned customers.
News
-
Xero Bolsters Customer Insights With $70 Million Acquisition of Syft
-
Xero Swings to NZ$174.6 Million Annual Profit on Jump in Revenue
-
Cloud-Accounting Provider Xero Enters Strategic Partnership With BILL
-
Xero Swings to 1st Half Profit, Maintains Fiscal Year Costs Forecast — Update
-
Xero Swings to 1st Half Profit, Maintains Fiscal Year Costs Forecast
Trading Information
- Previous Close Price
- A$148.72
- Day Range
- A$147.89–149.67
- 52-Week Range
- A$96.58–152.41
- Bid/Ask
- A$151.00 / A$141.76
- Market Cap
- A$22.82 Bil
- Volume/Avg
- 354,413 / 327,637
Key Statistics
- Price/Earnings (Normalized)
- 90.78
- Price/Sales
- 14.42
- Dividend Yield (Trailing)
- 0.00%
- Dividend Yield (Forward)
- 0.00%
- Total Yield
- —
Company Profile
Xero is a technology company originating from New Zealand, providing cloud-based accounting software, primarily for small and midsize enterprises, or SMEs, and accounting practices. As a first mover in the space for cloud-based accounting software, Xero has grown quickly to achieve dominant market share in New Zealand and Australia, displacing legacy providers. Xero has also expanded beyond its home region toward other English-speaking countries, primarily the United Kingdom.
- Sector
- Technology
- Industry
- Software - Application
- Stock Style Box
- Large Growth
- Total Number of Employees
- 5,080
- Website
- https://www.xero.com
Competitors
Valuation
|
Metric
|
XRO
|
INTU
|
WDAY
|
|---|---|---|---|
Price/Earnings (Normalized) | 90.78 | 36.50 | 36.97 |
Price/Book Value | 17.85 | 9.41 | 7.77 |
Price/Sales | 14.42 | 10.80 | 8.32 |
Price/Cash Flow | 41.76 | 33.09 | 26.39 |
Price/Earnings
XRO
INTU
WDAY
Financial Strength
|
Metric
|
XRO
|
INTU
|
WDAY
|
|---|---|---|---|
Quick Ratio | 6.20 | 0.72 | 1.92 |
Current Ratio | 6.62 | 1.29 | 2.04 |
Interest Coverage | 5.31 | 14.56 | 2.85 |
Quick Ratio
XRO
INTU
WDAY
Profitability
|
Metric
|
XRO
|
INTU
|
WDAY
|
|---|---|---|---|
Return on Assets (Normalized) | 9.57% | 16.07% | 17.72% |
Return on Equity (Normalized) | 21.33% | 27.22% | 36.06% |
Return on Invested Capital (Normalized) | 10.13% | 20.23% | 23.31% |
Return on Assets
XRO
INTU
WDAY
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United States