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XeroASX:XRO -2.61%74 Earnings Yield (Joel Greenblatt) % is 3.25% as of Mar. 2026, which is 1313% above its 10-year median of 0.23. GuruFocus rates ASX:XRO with a GF Score™ of 74/100 and a GF Value™ of A$199.74 (Possible Value Trap). The stock has 7 warning signs investors should review. Among 2,909 Software companies, Xero ranks better than 56.48% on this metric.
Xero's Enterprise Value for the quarter that ended in Mar. 2026 was A$12,972 Mil.
Xero's EBIT for the trailing twelve months (TTM) ended in Mar. 2026 was A$422 Mil. Xero's Earnings Yield (Joel Greenblatt) for the quarter that ended in Mar. 2026 was 3.25%.
The historical rank and industry rank for Xero's Earnings Yield (Joel Greenblatt) % or its related term are showing as below:
ASX:XRO'
s Earnings Yield (Joel Greenblatt) % Range Over the Past 10 Years
Min: -3.49 Med: 0.23 Max: 4.24
Current: 3.45
During the past 13 years, the highest Earnings Yield (Joel Greenblatt) of Xero was 4.24%. The lowest was -3.49%. And the median was 0.23%.
ASX:XRO's Earnings Yield (Joel Greenblatt) % is ranked better than 56.48% of 2909
companies
in the Software industry
Industry Median: 2.06
vs ASX:XRO: 3.45
Joel Greenblatt's definition of earnings yield has the same problems the regular earnings yield does. It does not consider the growth of the company. It only looks at one-year's business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.
A better indicator of the attractiveness of an investment which takes growth into account is the Forward Rate of Return (Yacktman) %. Xero's Forward Rate of Return (Yacktman) % for the quarter that ended in Mar. 2026 was 22.02%. The Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Joel Greenblatt defines the earnings yield using the above equation because it more accurately reflects the company's profitability relative to its stock price. Items like interest payment and tax etc. are not directly related to the company's operational profitability.
Enterprise Value instead of market cap (share price) is used in the calculation because it is the real price stock and bond investors together pay for the company.
Be Aware
Joel Greenblatt's definition of earnings yield has the same problems the regular earnings yield does. It does not consider the growth of the company. It only looks at one-year's business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.
Xero Earnings Yield (Joel Greenblatt) % Related Terms
Xero Earnings Yield (Joel Greenblatt) % Historical Data
* Premium members only.
The historical data trend for Xero's Earnings Yield (Joel Greenblatt) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Xero's Earnings Yield (Joel Greenblatt) %, along with its competitors' market caps and Earnings Yield (Joel Greenblatt) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Xero Earnings Yield (Joel Greenblatt) % vs Software Industry
For the Software industry and Technology sector, Xero's Earnings Yield (Joel Greenblatt) % distribution charts can be found below:
* The bar in red indicates where Xero's Earnings Yield (Joel Greenblatt) % falls into.
In his book, The Little That Beat the Market, hedge fund manager Joel Greenblatt defines Earnings Yield as operating income divided by enterprise value.
Xeros Earnings Yield (Joel Greenblatt) for the fiscal year that ended in Mar. 2026 is calculated as
For company reported semi-annually or annually, GuruFocus only calculate annual data for Earnings Yield (Joel Greenblatt) and apply the annual figure to corresponding quarter.
What does a Earnings Yield (Joel Greenblatt) % of 3.25% mean?
Xero (ASX:XRO) has a Earnings Yield (Joel Greenblatt) % of 3.25% as of Mar. 2026. Joel Greenblatt's earnings yield equals the ratio of earnings before interest and taxes to enterprise value. View historical data on Xero and its competitors. This is 1313% above median its historical median of 0.23. According to the industry distribution chart, Xero ranks #1266 out of 2909 companies in the Software industry, placing it in the top 43.5%.
Is Xero's Earnings Yield (Joel Greenblatt) % too high?
Xero's current Earnings Yield (Joel Greenblatt) % of 3.25% is 1313% above median its 10-year median of 0.23. The Software industry median Earnings Yield (Joel Greenblatt) % is 2.06. Xero's value of 3.25% is 57.8% above this industry median. Based on the distribution chart, Xero ranks #1266 out of 2909 companies in the Software industry, which is above the industry midpoint. Overall, Xero has a GF Score™ of 74/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Xero's Earnings Yield (Joel Greenblatt) % compare to UBER and SHOP?
According to the Software industry distribution chart, Xero ranks #1266 out of 2909 companies for Earnings Yield (Joel Greenblatt) %. This puts Xero in the upper half of its industry. The industry median Earnings Yield (Joel Greenblatt) % is 2.06. Xero's value of 3.25% is 57.8% above this benchmark. While the company's 10-year median is 0.23 vs. the industry median of 2.06, Xero has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Earnings Yield (Joel Greenblatt) % for a Software company?
The median Earnings Yield (Joel Greenblatt) % among Software companies is 2.06, based on 2,909 companies in the industry. Companies in the top quartile (top 25%) have a Earnings Yield (Joel Greenblatt) % significantly above this median, while those in the bottom quartile fall well below. However, Earnings Yield (Joel Greenblatt) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Xero's current Earnings Yield (Joel Greenblatt) % of 3.25% is 57.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Earnings Yield (Joel Greenblatt) % mean?
A high Earnings Yield (Joel Greenblatt) % can signal that a stock is expensive relative to its fundamentals. Joel Greenblatt's earnings yield equals the ratio of earnings before interest and taxes to enterprise value. View historical data on Xero and its competitors. For the Software industry, the median Earnings Yield (Joel Greenblatt) % is 2.06 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xero's current Earnings Yield (Joel Greenblatt) % is 3.25%, which is 1313% above median its own 10-year median of 0.23. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Xero stock overvalued right now?
Based on GuruFocus' analysis, Xero (ASX:XRO) is currently considered Possible Value Trap. The stock's GF Value™ is A$199.74, compared to a current price of A$67.85 — trading 66% below its estimated fair value. The current Earnings Yield (Joel Greenblatt) % is 3.25%, which is 1313% above median its 10-year median of 0.23 and 57.8% above the Software industry median of 2.06. Xero's overall GF Score™ is 74/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Earnings Yield (Joel Greenblatt) % calculated?
Earnings Yield (Joel Greenblatt) % is calculated from a company's financial statements. For Xero (ASX:XRO), the current Earnings Yield (Joel Greenblatt) % is 3.25% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Xero (ASX:XRO) Overvalued in 2026?
Based on GuruFocus' analysis, Xero stock appears to be undervalued.
The current stock price of A$67.85 is trading 66% below its estimated GF Value™ of A$199.74.
GuruFocus considers Xero to be Possible Value Trap.
Key valuation signals for ASX:XRO:
Earnings Yield (Joel Greenblatt) %: 3.25% (1313% above median its 10-year median of 0.23)
GF Value™: A$199.74 vs. price of A$67.85 (66% below fair value)
Industry Position: 57.8% above the Software median (#1266 of 2909)
No single metric tells the full story. See the ASX:XRO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Xero is a technology company originating from New Zealand, providing cloud-based accounting software, primarily for small and midsized enterprises, or SMEs, and accounting practices. As a first mover in the space for cloud-based accounting software, Xero has grown quickly to achieve dominant market share in New Zealand and Australia, displacing legacy providers. Xero has also expanded beyond its home region toward other English-speaking countries, primarily the UK and the US.
74GF Score
Get the complete analysis for ASX:XRO
Earnings Yield (Joel Greenblatt) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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