Xero Limited (XRO.AX)

DCF Valuation · Technology · Software - Application

Valuation as at 2026-08-14 · see also the ASX 300 Most Undervalued screen

About Xero Limited

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.

Source: Yahoo Finance company profile · factual description, not KashVector commentary

Xero Limited XRO.AX

Technology · Software - Application

Price
$81.49
Market Cap
$14.30B
Free Cash Flow
$0.18B
Beta
0.71
P/E (TTM)
N/A
52-Week Range
$61.45–$173.44

Xero Limited's price & financial trends

Annual reporting periods — this market does not have reliable quarterly data on Yahoo (either it isn't required, or coverage is incomplete), so annual is the most granular consistent series across free cash flow and dividends.

Data as at 2026-08-14

Share price · last 2 years

$81.49 -43% vs 2024-08
ASX 200 $142.84$183.27$179.80$121.84$80.04$81.49 2024-082025-012025-062025-112026-042026-08

Earnings per share (diluted) Per year

-$0.16 +78% vs FY23
-$0.71$1.05$1.34-$0.16FY23FY24FY25FY26

Free cash flow Per year

$0.43B +281% vs FY23
$0.11B$0.33B$0.48B$0.43BFY23FY24FY25FY26

Dividend per share

No dividend history available.

Value investing scale · Buffett · Dalio · Graham

Partial Fit
8 / 20 combined score

4 criteria had no data

See the full Buffett, Dalio & Graham breakdown for XRO.AX →

Intrinsic value estimate · 5-year forecast

BEAR
$23.15
vs current $81.49
-71.6% ❌ Overvalued
BASE
$44.98
vs current $81.49
-44.8% ❌ Overvalued
BULL
$65.93
vs current $81.49
-19.1% ⚠️ Fairly Valued

Assumptions used in this valuation

Every input below is either fetched live from Yahoo Finance or a documented default — nothing is hidden.

Starting free cash flow
$0.18B
Reported free cash flow (Yahoo)
Risk-free rate
4.80% ● LIVE
Live 10-yr govt bond
Beta
0.71
Floored for non-US stocks
Equity risk premium
6.00%
Market-specific seed
Cost of debt
7.02%
From income statement
Tax rate
25.00%
Estimated default
Capital structure
E 89% / D 11%
Market cap vs total debt
Projection horizon
5 years
+ terminal value beyond
BearBaseBull
5-yr FCF growth12.5%25.0%30.0%
Terminal growth2.5%2.5%2.5%
WACC (discount rate)9.66%8.66%7.66%

Cost of Equity = Risk-free rate + Beta × Equity Risk Premium = 4.80% + 0.71 × 6.00% = 9.08% · WACC = weighted by 89%/11% capital structure

These numbers come from running Xero Limited's cash flows through the mechanical DCF formula and assumptions above — not from any view on the news, management, or XRO.AX's competitive position. What is DCF?

Want to test your own growth or discount-rate assumptions?Open the full interactive calculator, pre-filled with XRO.AX →

More ASX stocks we've valued

Not financial advice. DCF valuations are highly sensitive to assumptions — small changes in growth rate or discount rate produce large swings in output. This is a mechanical calculation, not a recommendation to buy, hold, or sell.

About this valuation

Computed on 2026-08-14 from Yahoo Finance data, using the same engine as the full DCF tool and the ASX 300 Most Undervalued screen. Every figure above is a point-in-time snapshot of that date — change any assumption yourself in the interactive tool for a live one.

Frequently asked questions

Is Xero Limited (XRO.AX) undervalued?

The Base-case DCF estimates intrinsic value at $44.98 vs a price of $81.49 on 2026-08-14 — a -44.8% margin, so the Base case reads overvalued. This is a mechanical output, not advice.