Xero Limited

XRO.AX

Software - Application · Technology

Exchange

Australian Securities Exchange

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Mar 31, 2026

How the score breaks down

Quality

Mixed

Growth

Good

Cash Flow

Exceptional

Stability

Good

Valuation

Good

Track this stock — start free trial

Winston Score History

The full picture

Xero is a cloud-based accounting software company that helps small businesses manage their finances online. Its main products include tools for invoicing, payroll, expense tracking, and bank reconciliation. Xero connects small business owners with their accountants and bookkeepers, and it competes directly with Intuit's QuickBooks in a global market for small business accounting software.

Xero makes money by charging monthly subscription fees to businesses and accounting professionals. It is headquartered in New Zealand but generates most of its revenue from Australia, the United Kingdom, and North America, with over 4 million subscribers worldwide. Its moat comes from the sticky nature of accounting software — businesses rarely switch once their financial data and workflows are embedded in a platform — and from its large network of accountant and bookkeeper partners who recommend the product. The key growth driver is expanding its subscriber base in North America, where it remains a distant second to QuickBooks and has significant room to grow.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+46.8% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

-78.2% YoY

YoY Growth Rate

Earnings declining

Insider Activity

6.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

A$2.1B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Xero Limited grew revenue 47% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

66.7%

Premium pricing power — 66.7% gross margin

Profit after running costs

Operating Margin

11.5%

Modest — 11.5% operating margin

Return on the money invested

ROCE

5.1%

Weak — 5.1% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Growth

Sales growth

Sales YoY

+36.1%

Fast-growing sales (+36.1% YoY)

Profit growth

EPS YoY

-28.9%

Earnings shrinking (-28.9% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

5/8 quarters

Mixed — about half the quarters showed growth

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Cash Flow

Profit that turns into cash

Cash Conversion

539%

Turns 539% of profit into real cash

Spare cash per sale

FCF Margin

32.4%

Converts sales into free cash efficiently (32.4%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Stability

What it owes vs what it owns

Debt / Equity

0.36

Conservative — low debt load (0.36)

Covers its interest

Interest Cover

2.10x

Tight — interest eats into profit (2.1x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Valuation

Price vs profit

P/E Ratio (TTM)

94.7x

no trend

Expensive — P/E 94.7

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+69.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (94.7 → 25.4)

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Dividends

Not applicable for this business.

🔒 See full fundamentals and if they are improving or declining — click here for your free trial now.

Start free trial