Xero Ltd

XRO: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Xero: US Expansion Continues to Drive Up Customer Acquisition Costs

Roy Van Keulen , Leo Wang

Mar 26, 2025

We increase our fair value estimate for narrow-moat Xero by 2% to AUD 92 per share ahead of its fiscal 2025 results to be released on May 15, 2025. The increase is driven by the time value of money, with our forecasts intact. Shares screen as significantly overvalued at current prices, as investors are baking in significant growth from the US. However, we believe this market will not generate positive returns for the company.

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Xero Ltd

Xero: US Expansion Continues to Drive Up Customer Acquisition Costs

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