Xero Ltd

XRO: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Xero Earnings: Price Hikes Deliver a Strong Result, but Limits to Pricing Power May Be in Sight

Roy Van Keulen

Nov 14, 2024

We raise our fair value estimate for narrow-moat Xero by 6% to AUD 90 per share following first-half fiscal 2025 results. The company saw an acceleration in revenue growth to 25% on the prior corresponding period, or pcp, due to strong price increases. But we don’t expect the pace of price increases can be maintained. At current prices, Xero shares screen as materially overvalued, at almost double our fair value estimate.

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Xero Ltd

Xero Earnings: Price Hikes Deliver a Strong Result, but Limits to Pricing Power May Be in Sight

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