Insights

The Xero (ASX:XRO) share price is up 50% over the past 12 months

What’s behind the share price move?
The post The Xero (ASX:XRO) share price is up 50% over the past 12 months appeared first on The Motley Fool Australia. –

ASX accounting software developer Xero Limited (ASX: XRO) has been one of the top-performing shares to own over the past 12 months. In that time, the Xero share price has risen well over 50% (to $147.89, as at the time of writing). With a market cap of almost $22 billion, it is now larger than ASX stalwarts like REA Group Limited (ASX: REA) and Woodside Petroleum Limited (ASX: WPL).

Let’s take a quick look under the hood to see what has got the Xero share price zooming higher over the past year.

Company background

Xero develops cloud-based software that helps small and medium-sized business manage their day-to-day accounting. Xero’s platform allows users to perform a range of vitally important tasks, such as generating invoices and purchase orders, tracking payments, managing payroll, and calculating GST returns. The software can also create insightful reporting and analysis on the business’ performance.

Xero operates a software-as-a-service (SaaS) business model. This means that, instead of selling the software itself, Xero sells licenses that grant users remote access to their platform. SaaS is facilitated by cloud technology, and is a very popular business model amongst many new and emerging ASX software companies, like Whispir Ltd (ASX:WSP), WiseTech Global Ltd (ASX:WTC), and Dubber Corp Ltd (ASX:DUB).

Because the COVID-19 pandemic has forced so many companies to adopt remote-working arrangements, SaaS products have become more popular recently. Having these sorts of software platforms located in the cloud helps ensure employees can access them from wherever they are working, and it also means business data can be kept safe and secure.

This is particularly important for small to medium-sized businesses that may lack the resources and digital infrastructure necessary to support remote-working arrangements.

Recent financials

Because Xero is headquartered in New Zealand, it reports based on a financial year ending 31 March, which means it released its FY21 results to the market back in May.

Xero reported strong results across the board, with operating revenue up 18% year-on-year to NZ$848.8 million, supported by a 20% uplift in subscriber numbers (to 2.74 million). Net profit after tax (NPAT) increased by NZ$16.4 million year-on-year (or a whopping 493%).

Commenting on the result, Xero CEO Steve Vamos spoke about how Xero was supporting small businesses to navigate the many challenges of the pandemic. He said:

The past year has brought home to many people in small business the need to understand in real-time their financial position and how it may change. The value and importance our customers place on their subscription and connection to the broader Xero community is increasing.   

Recent movements in the Xero share price

The Xero share price declined sharply just prior to the release of the company’s FY21 results – but since then it has again rallied strongly. As at the time of writing, the Xero share price is just 6% shy of the 52-week high price of $157.99 it reached in December.

The post The Xero (ASX:XRO) share price is up 50% over the past 12 months appeared first on The Motley Fool Australia.

Should you invest $1,000 in Xero right now?

Before you consider Xero, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Xero wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

2 strong ASX tech shares that might be good buys

Top broker thinks these ASX tech shares are buys

2 ASX growth shares brokers love

Why the Xero (ASX:XRO) share price has climbed 5% in a month
ASX tech shares lagging the ASX 200 on Thursday

Motley Fool contributor Rhys Brock owns shares of Dubber Corporation, REA Group Limited, Whispir Ltd, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dubber Corporation, Whispir Ltd, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended Dubber Corporation, WiseTech Global, and Xero. The Motley Fool Australia has recommended REA Group Limited and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
Trade The US Market With ZERO Brokerage* + FREE Access To Trading Ideas & Value Analysis Tools. Click Here!