- Assessing the market for small business accounting software, we conclude that Xero has faced heightened competition in international markets despite anticipated pandemic tailwinds.
- With sales efficiency falling, we expect Xero will need to ramp sales and marketing spend to re-ignite sale growth. This will be detrimental to free cash flow generation.
- With decelerating growth, consensus forecast for FY3/2022 free cash flow yield is 0.3%. With this lowly yield, we are neutral on the shares.
For further details see:
Xero: Sales Efficiency Decline Sets A Cautious Tone