Xero Ltd (XRO) fair value: what the stock is really worth
As of Nov 6, 2026: fair value (intrinsic value) of Xero Ltd stock A$66.14, price A$70.74, that is 6.5% below the price, quality 42 out of 100. Rating: fairly valued. Calculated from audited financials with 22 of our 26 valuation models and 37 quality factors, updated daily.
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TechnologyAU · Home New Zealand · ISIN NZXROE0001S2
XLSome dataNov 6, 2026
Xero Ltd
XRO · AU
Fairly valued,weak quality
The stock costs about what our calculation considers fair.
Healthy Growth(revenue 5y +28.4 %/yr in AUD)
Low debt
Generates free cash flow
Upbeat coverage
Last quarter vs. a year ago: revenue +41%, profit +34%.
Fair value A$66.14 · Fairly valued (−6.5%)
Quality 42/100
Thin margins · 6.1% net margin (TTM)
Some data
Trails peers(4/12)
Narrow moat42/100 · thin data
⚠ DilutionQuality growth
Risks from the AI analysis
🚩Generative AI could replace core accounting software🚩Cheaper rivals like Zoho Books or QuickBooks could erode share
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 6, 2026.
How to read this chart
60‑month range A$55.31 – A$194.21 · fair‑value band A$46.31 – A$85.98 · the A$70.74 price screens above the A$66.14 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 6, 2026.
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Xero Limited, together with its subsidiaries, provides online business solutions for small businesses and their advisors in Australia, New Zealand, the United Kingdom, the United States, and internationally. It offers accounting, payroll, payments and other solutions through its Xero platform.
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The company also provides Planday, an online employee scheduling software; Hubdoc for bills and receipts; Syft, which creates reports, forecasts, dashboards, and consolidations with AI insights; Melio, a place to pay bills, send invoices, and automate AP/AR workflows; TaxCycle, a tax preparation software for accountants and bookkeepers; and Tickstar, an e-invoicing product.
Xero Limited was incorporated in 2006 and is headquartered in Wellington, New Zealand.
Stock analysis
Xero Ltd (XRO) currently trades at A$70.74, while our model-based Fair Value estimate is A$66.14, so the stock looks roughly fairly valued today (gap 7.0%).
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Valuation
Bull case: the DCF Models group reads highest at a median of A$90.91 per share, and 7 of the 22 models we run sit above the A$70.74 price.
Bear case: the Economic Profit group reads lowest at A$12.05, and 15 of the 22 models stay below the price. Data coverage for this calculation is medium.
Scenario range: A$46.31 (bear) to A$85.98 (bull), the price of A$70.74 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 42/100 (below-average quality), in the Technology sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Xero Ltd reported revenue of 3.0B NZD in FY2026 versus 1.1B NZD in FY2022, a compound +27.6%/yr. Reported net income was 180M NZD in FY2026.
Key figures
Market cap A$12.4B (≈ $8.6B) Mid · P/S ratio 4.11 · EPS (TTM) A$−0.1700 · Net margin 6.1% · Return on equity 4.4% · Return on assets (EBIT) 3.8% · Operating margin 11.5% · Revenue (TTM) A$2.8B.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 42 out of 100 (low confidence).
What moves the price
The share trades about 51% below its 52-week high and 28% above its 52-week low, currently below its 200-day average.
For context, the median of 10 Technology peers we cover trades at 10% fair-value upside, at −7%, XRO screens richer than that median.
Fair Value models
BearA$46.31Fair Value A$66.14BullA$85.98
Price A$70.74 · Downside -6.5%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Best data coverage
EPVA$10.54A$12.05A$13.3774
FCF DCFA$85.46A$133.40A$285.7773
Growth DCFA$80.46A$157.70A$284.0672
All 22 models by family
DCF Models
FCF DCFA$85.46A$133.40A$285.7773
Owner EarningsA$57.13A$127.88A$275.9268
5Y Revenue ExitA$37.83A$55.55A$91.8969
5Y EBITDA ExitA$62.37A$105.17A$188.9470
5Y P/E ExitA$37.61A$66.62A$103.4967
10Y Revenue ExitA$51.58A$90.91A$109.4765
10Y EBITDA ExitA$70.20A$143.65A$268.2163
10Y P/E ExitA$52.16A$90.43A$147.1360
Earnings-Based
Graham-DoddA$5.62A$39.20A$55.0161
Lynch FVA$20.25A$28.93A$37.6159
PEG = 1.0A$20.25A$28.93A$37.6155
EPVA$10.54A$12.05A$13.3774
Multiples
P/E MultipleA$17.36A$23.15A$28.9363
P/S MultipleA$10.54A$14.05A$17.5758
EV/EBITA$26.85A$37.72A$48.5865
EV/EBITDAA$44.47A$61.20A$77.9467
EV/RevenueA$10.74A$17.80A$24.8652
Growth DCF
Growth DCFA$80.46A$157.70A$284.0672
Rev-Margin DCFA$41.08A$63.49A$111.0768
Economic Profit
Residual IncomeA$18.18A$17.79A$18.2468
ROIC CompounderA$10.54A$12.05A$13.3770
Growth Earnings
Growth-Adj P/EA$29.25A$41.78A$54.3165
The fair value above starts from this blend and is adjusted for dilution from new shares.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.90/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+54.9%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+28.3%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+28.4%
Start year 2021 (pandemic). Over 10 years: +31.6% a year
Revenue growth 18 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+74.3%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+67.6%
Earnings growth per share plus dividend.
Earnings per share, growth per year+67.6%
Dividend (yield on the price)0.0%
Profit margin 2021 to 2026 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.7% → 13%
Growth Forecast
Little optimism in the price
The price assumes less growth than the company has delivered so far and less than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
−1.0%
The company could shrink this much every year for the next five years and today's price would still be justified.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+18.6%
Yearly sales growth analysts expect, extended to five years.
After inflation (Australia: IMF forecast 3.0% a year to 2030, 2.9% from 2016 to 2025) that is about −3.9% a year for the price and +15.2% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (97 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Hype
Recent news coverage is unusually upbeat, far more positive than stocks are typically covered.
AI conclusion: Xero demonstrates strength through revenue growth via subscriber gains, pricing power and the Melio deal yet shows weakness in squeezed margins from integration costs and a shift to lower-margin activities alongside low ROE.
Main risk: General-purpose AI agents might handle bookkeeping, reconciliation and reporting directly, reducing demand for Xero's platform among small businesses and accountants.
Bull case: Xero could embed its proprietary data and compliance infrastructure into AI agents, turning the technology into a moat that strengthens recurring revenue through enhanced platform features.
Bear case: If general AI agents commoditise accounting workflows or cheaper rivals capture significant share, Xero's subscriber growth and margins could stagnate as its core products become less differentiated.
Xero posted 31 percent revenue growth in FY26 on subscriber gains, pricing power and the Melio deal that deepens its US payments reach. Net profit still fell as integration costs and the shift toward lower-margin activities squeezed margins. Will the larger addressable market and fresh AI features ultimately expand high-quality recurring revenue faster than added expenses and workflow automation risks compress it?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Software - Application · 632 stocks
Beats the industry median on 4/12 measures
Overall it trails its industry peers.
Valuation
Quality Score42 · Bottom 25%
Fair Value upside−6.5% · Below median
Profitability
Return on equity (12 months)4.4% · Below median
Return on assets2.0% · Below median
Net margin (12 months)6.1% · Above median
Operating margin (12 months)11.5% · Above median
Growth and dividend
Revenue growth (quarter YoY)40.8% · Top 25%
Balance sheet
Debt / equity0.11× · Above median
Valuation Multiplesvs Software - Application median · lower = cheaper
P/E (12 months)89.4× · Priciest 25%
P/B2.28× · book value is mostly goodwill ⓘGoodwill and other intangible assets are larger than the equity. The book value mainly reflects prices paid for past acquisitions, so we do not rank this P/B against the peer group.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Xero Ltd Fair Value". https://www.fairvalue-calculator.com/stock/XRO
Frequently asked questions
Is Xero Ltd (XRO) overvalued or undervalued?
As of Nov 6, 2026, our model estimates a fair value of A$66.14 versus a price of A$70.74, about 7% lower (fairly valued).
What is the fair value of XRO?
Our model-based fair value for Xero Ltd is A$66.14 (as of Nov 6, 2026), built from audited fundamentals. The current price: A$70.74.
What is the quality score of XRO?
Xero Ltd has a Quality Score of 42/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Xero Ltd (XRO)?
Our model-based price target is the fair value of A$66.14 (as of Nov 6, 2026) from 22 valuation models. Cautious scenario A$46.31, optimistic scenario A$85.98. It is a calculation from audited fundamentals, not an analyst target.
What is the Xero Ltd stock forecast for 2026?
Our models put fair value at A$66.14, about 7% lower versus a price of A$70.74 (fairly valued). Cautious scenario A$46.31, optimistic scenario A$85.98. The calculation is refreshed regularly with new filings.
What is the revenue of Xero Ltd (XRO)?
Xero Ltd reported trailing-twelve-month revenue of about A$2.8B (latest available figure, as of Nov 6, 2026).
What growth is priced into Xero Ltd (XRO)?
For today's price to be fair in a discounted-cash-flow model, Xero Ltd would have to grow free cash flow by -1.0 % per year for five years (discount rate 9.0 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +28.4 % per year. As of Nov 6, 2026.
What discount rate (WACC) does the fair value of XRO use?
Our models discount Xero Ltd at 9.0 %: a base by market capitalisation (mid), damped by beta 0.81, country premium for Australia. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Xero Ltd that is -1.0 % per year a year over ten years, using the same discount rate (9.0 %) and the same formula as our fair value.
How much growth has Xero Ltd (XRO) delivered so far?
Over the past 5 years revenue at Xero Ltd grew +28.4 % a year. The price currently implies -1.0 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Xero Ltd (XRO) growing?
The median revenue growth in the sector is +11.3 % a year. That is the yardstick for the growth priced into Xero Ltd (-1.0 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Xero Ltd (XRO)?
The free-cash-flow yield on the price is 7.98 %: that much free cash flow Xero Ltd produces per unit of market value. When it exceeds the discount rate of our models (9.0 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Xero Ltd (XRO)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Xero Ltd it is A$66.14 per share (as of Nov 6, 2026), against a price of A$70.74. It is the blended result of 22 valuation models (cash flow, earnings, asset, dividend).
Is Xero Ltd stock overvalued or undervalued in 2026?
As of Nov 6, 2026, XRO trades above its calculated fair value: price A$70.74, fair value A$66.14, a gap of about −7% (fairly valued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of XRO?
No. The price is what the market pays today (A$70.74); the fair value is what the company's own numbers justify (A$66.14). For Xero Ltd the two are A$4.60 per share apart. That gap is exactly why we show both numbers side by side.
How much is Xero Ltd worth?
The market values Xero Ltd at about A$12.4B (market capitalisation, as of Nov 6, 2026). Per share that is A$70.74; our models calculate a fair value of A$66.14 per share.
What do the bullish and bearish scenarios say about XRO?
Our models span a range for Xero Ltd: cautious scenario A$46.31, base A$66.14, optimistic A$85.98 per share (as of Nov 6, 2026, price A$70.74). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of XRO?
Xero Ltd trades at a price-to-earnings ratio of 89.4 (as of Nov 6, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of A$66.14 is built from several models across several years. Other multiples: P/B 2.3, P/S 4.5, EV/EBITDA 30.9.
How solid is the balance sheet of Xero Ltd (XRO)?
Balance-sheet figures for Xero Ltd (as of Nov 6, 2026): return on equity 4.4%, debt of 0.11 per unit of equity. They feed the Quality Score of 42/100, which measures business quality independently of the share price.
How far is XRO from its 52-week high?
Xero Ltd trades at A$70.74, about 51% below its 52-week high of A$145.37 and 28% above the low of A$55.31 (as of Nov 6, 2026). Distance from the high says nothing about value: that is what the fair value of A$66.14 is for.
Which stocks are comparable to Xero Ltd?
From the same area (Technology) we also value SAP SE, Shopify Inc, Salesforce, Inc, ServiceNow, Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Xero Ltd stock attractive at the current price?
The data as of Nov 6, 2026: price A$70.74, calculated fair value A$66.14 (−7%), Quality Score 42/100, from 22 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of XRO calculated?
We run Xero Ltd through 22 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of A$66.14, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 15.5% above its aggregate fair value. Xero Ltd itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Xero Ltd (XRO)?
The closing price on Nov 6, 2026 was A$70.74. Our model-based fair value is A$66.14, about 7% lower (fairly valued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Xero Ltd right now?
The price sits close to our fair value, market and models broadly agree here, little valuation tension. A fairly wide model range (A$46.31 to A$85.98) leaves room in how you read the outcome.
Key figures of Xero Ltd
How large is the market capitalisation of Xero Ltd (XRO)?
The market capitalisation of Xero Ltd is A$12.4B (≈ $8.6B). The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Xero Ltd (XRO)?
The price-to-sales ratio of Xero Ltd is 4.11 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Xero Ltd (XRO)?
Earnings per share at Xero Ltd are A$−0.1700. Earnings per share over the last twelve months: total profit spread across every single share.
What is the net margin of Xero Ltd (XRO)?
The net margin of Xero Ltd is 6.1% (fiscal year 2026). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Xero Ltd (XRO)?
The return on equity (ROE) of Xero Ltd is 4.4% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Xero Ltd (XRO)?
On an EBIT basis the return on assets of Xero Ltd is 3.8% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Xero Ltd (XRO)?
The operating margin of Xero Ltd is 11.5% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Xero Ltd (XRO)?
Revenue at Xero Ltd is growing +40.8% versus a year earlier (3y avg +28.3%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Xero Ltd (XRO)?
Earnings per share at Xero Ltd are growing +33.9% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Xero Ltd (XRO) carry?
The net debt of Xero Ltd is A$1.3B (fiscal year 2026, ≈ 1.3 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Some data
Nov 6, 2026