Xero Limited (AU:XRO) stands out among key Australian stocks, receiving a bullish stance from analysts. Analysts confirmed their Buy ratings on XRO stock after the company released its FY24 results last month, showcasing robust growth and profitability. Year-to-date, the stock has gained 15%. Analysts anticipate further growth potential of 20% in Xero stock.
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Xero offers cloud-based accounting software to small businesses. The company has 4.16 million subscribers across New Zealand, Australia, and the UK.
Highlights from Xero’s FY24 Results
In Fiscal 2024, revenues grew 22% year-over-year to NZ$1.7 billion. The company’s earnings soared by 75% to NZ$527 million.
The growth was driven by an 11% rise in subscribers to 4.16 million. Additionally, the average revenue per user (ARPU) saw a 14% increase to NZ$39.29.
Bullish Outlook for Xero Share Price
Over the last month, analysts from Macquarie, J.P. Morgan, UBS, Citi, and Goldman Sachs have confirmed their Buy ratings on Xero stock. Analysts believe the company’s strong financial performance and profit growth will push the share price higher.
Most recently, Macquarie raised its price target on XRO stock to AU$184.40 from AU$154.60, predicting an upside of about 42%.
Similarly, Goldman Sachs analyst Kane Hannan increased his price target from AU$156 to AU$164 last month, now implying an upside potential of 26%. Hannan is confident about the company’s long-term outlook and significant market potential. Goldman Sachs emphasizes that, with 4.16 million subscribers, Xero has barely tapped into its addressable market.
Additionally, Hannan believes that the company is well-positioned to capitalize on the digital evolution of small enterprises globally.
Are Xero Shares a Good Buy?
As per the consensus among analysts on TipRanks, XRO stock has been assigned a Moderate Buy rating, based on 12 recommendations, including nine Buys. The Xero share price target is AU$155.68, which is 19.4% above the current level.
