Xero Ltd (XRO) fair value: what the stock is really worth
We calculate from audited financials what Xero Ltd is really worth. The fair value tells you whether the price is too high or too low, the quality score (0 to 100) how solid the business behind it is. 26 models, 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 18, 2026.
How to read this chart
60‑month range A$61.58 – A$194.21 · fair‑value band A$42.84 – A$79.55 · the A$62.78 price screens above the A$61.20 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Sep 18, 2026.
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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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. 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$62.78, while our model-based Fair Value estimate is A$61.20, implying the stock looks roughly 2.6% fairly valued today.
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Valuation
Bull case: the DCF Models group reads highest at a median of A$107.46 per share, and 11 of the 26 models we run sit above the A$62.78 price.
Bear case: the Economic Profit group reads lowest at A$15.19, and 15 of the 26 models stay below the price. Evidence for this calculation is medium.
Scenario range: A$42.84 (bear) to A$79.55 (bull), the price of A$62.78 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 A$3.0B in FY2026 versus A$1.1B in FY2022, a compound +27.6%/yr. Reported net income was A$180M in FY2026.
Key figures
Market cap A$12.7B (≈ $9.1B) · P/S ratio 4.99 · EPS (TTM) A$−0.1600 · Dividend yield 0.1% · Net margin 6.1% · Return on equity 4.4% · Return on assets (EBIT) 3.8% · Operating margin 11.5%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 52 out of 100 (low confidence).
What moves the price
The share trades about 68% below its 52-week high, currently below its 200-day average.
For context, the median of 10 Technology peers we cover trades at −16% fair-value upside, at −3%, XRO screens cheaper than that median.
Fair Value models
Bear A$42.84Fair Value A$61.20Bull A$79.55
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model.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.Evidence ⓘEvidence = 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.
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%
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.
+67.7%
Earnings growth per share plus dividend.
Earnings per share, growth per year+67.6%
Dividend (yield on the price)0.1%
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).
−3.7%
Yearly growth needed for the next five years to justify today's price.
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.
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.
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 · 702 stocks
Beats the industry median on 7/13 measures
A mixed picture versus its industry peers.
Valuation
Quality Score42 · Bottom 25%
Fair Value upside−69% · Bottom 25%
Profitability
Return on equity (TTM)4% · Above median
Return on assets3% · Above median
Net margin (TTM)6% · Above median
Operating margin (TTM)11% · Above median
Growth and dividend
Revenue growth41% · Top 25%
Dividend yield (TTM)0.1% · Bottom 25%
Balance sheet
Debt / equity0.11× · Above median
Valuation Multiplesvs Software - Application median · lower = cheaper
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 Sep 18, 2026, our model estimates a fair value of A$61.20 versus a price of A$62.78, about −3% upside (fairly valued).
What is the fair value of XRO?
Our model-based fair value for Xero Ltd is A$61.20 (as of Sep 18, 2026), built from audited fundamentals. The current price: A$62.78.
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$61.20 (as of Sep 18, 2026) from 26 valuation models. Cautious scenario A$42.84, optimistic scenario A$79.55. 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$61.20, about −3% upside versus a price of A$62.78 (fairly valued). Cautious scenario A$42.84, optimistic scenario A$79.55. 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 Sep 18, 2026).
Does Xero Ltd pay a dividend?
Xero Ltd currently shows a dividend yield of about 0.08% relative to its recent price (as of Sep 18, 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 -3.7 % per year for five years (discount rate 8.8 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +28.4 % per year. As of Sep 18, 2026.
What discount rate (WACC) does the fair value of XRO use?
Our models discount Xero Ltd at 8.8 %: a base by market capitalisation (mid), damped by beta 0.72, 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 -3.7 % per year a year over ten years, using the same discount rate (8.8 %) 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 -3.7 % 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 +8.0 % a year. That is the yardstick for the growth priced into Xero Ltd (-3.7 % 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 8.99 %: that much free cash flow Xero Ltd produces per unit of market value. When it exceeds the discount rate of our models (8.8 %), 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$61.20 per share (as of Sep 18, 2026), against a price of A$62.78. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Xero Ltd stock overvalued or undervalued in 2026?
As of Sep 18, 2026, XRO trades above its calculated fair value: price A$62.78, fair value A$61.20, a gap of about −3% (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$62.78); the fair value is what the company's own numbers justify (A$61.20). For Xero Ltd the two are A$1.58 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$12.7B (market capitalisation, as of Sep 18, 2026). Per share that is A$62.78; our models calculate a fair value of A$61.20 per share.
What do the bullish and bearish scenarios say about XRO?
Our models span a range for Xero Ltd: cautious scenario A$42.84, base A$61.20, optimistic A$79.55 per share (as of Sep 18, 2026, price A$62.78). The range comes from different growth and margin assumptions, not from analyst opinions.
How solid is the balance sheet of Xero Ltd (XRO)?
Balance-sheet figures for Xero Ltd (as of Sep 18, 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$62.78, about 68% below its 52-week high of A$196.52 (as of Sep 18, 2026). Distance from the high says nothing about value: that is what the fair value of A$61.20 is for.
Which stocks are comparable to Xero Ltd?
From the same area (Technology) we also value SAP SE, Shopify Inc, Uber Technologies, Inc, Salesforce, 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 Sep 18, 2026: price A$62.78, calculated fair value A$61.20 (−3%), Quality Score 42/100, from 26 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 26 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$61.20, 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 16.1 % 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 Sep 18, 2026 was A$62.78. Our model-based fair value is A$61.20, about −3% upside (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$42.84 to A$79.55) 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$12.7B (≈ $9.1B). The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Xero Ltd (XRO)?
The price-to-sales ratio of Xero Ltd is 4.99 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Xero Ltd (XRO)?
Earnings per share at Xero Ltd are A$−0.1600. Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Xero Ltd (XRO)?
The dividend yield of Xero Ltd is 0.1%. Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
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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Sep 18, 2026