XeroASX:XRO +1.77%81 FCF Margin % is 12.55% as of Mar. 2026, which is 82% above its 10-year median of 6.91. GuruFocus rates ASX:XRO with a GF Score™ of 81/100 and a GF Value™ of A$195.57 (Possible Value Trap). The stock has 7 warning signs investors should review. Among 2,815 Software companies, Xero ranks better than 85.08% on this metric.
FCF Margin % is calculated as Free Cash Flow divided by its Revenue. Xero's Free Cash Flow for the
six
months ended in Mar. 2026 was A$157 Mil. Xero's Revenue for the
six
months ended in Mar. 2026 was A$1,249 Mil. Therefore, Xero's FCF Margin % for the quarter that ended in Mar. 2026 was 12.55%.
The historical rank and industry rank for Xero's FCF Margin % or its related term are showing as below:
ASX:XRO'
s FCF Margin % Range Over the Past 10 Years
Min: -23.94 Med: 6.91 Max: 25
Current: 18.81
During the past 13 years, the highest FCF Margin % of Xero was 25.00%. The lowest was -23.94%. And the median was 6.91%.
ASX:XRO's FCF Margin % is ranked better than 85.08% of 2815
companies
in the Software industry
Industry Median: 2.41
vs ASX:XRO: 18.81
Xero FCF Margin % Related Terms
Xero FCF Margin % Historical Data
* Premium members only.
The historical data trend for Xero's FCF Margin % 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.
ASX:XRO vs CRM, SHOP, UBER: FCF Margin % Comparison
For the Software - Application subindustry, Xero's FCF Margin %, along with its competitors' market caps and FCF Margin % 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 FCF Margin % vs Software Industry
For the Software industry and Technology sector, Xero's FCF Margin % distribution charts can be found below:
* The bar in red indicates where Xero's FCF Margin % falls into.
* 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.
Xero (ASX:XRO) has a FCF Margin % of 12.55% as of Mar. 2026. Free cash flow margin is the ratio of total free cash flow to net sales. View historical data on Xero and its competitors. This is 82% above median its historical median of 6.91. According to the industry distribution chart, Xero ranks #420 out of 2815 companies in the Software industry, placing it in the top 14.9%.
Is Xero's FCF Margin % too high?
Xero's current FCF Margin % of 12.55% is 82% above median its 10-year median of 6.91. The Software industry median FCF Margin % is 2.41. Xero's value of 12.55% is 420.7% above this industry median. Based on the distribution chart, Xero ranks #420 out of 2815 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Xero has a GF Score™ of 81/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Xero's FCF Margin % compare to CRM and SHOP?
According to the Software industry distribution chart, Xero ranks #420 out of 2815 companies for FCF Margin %. This places Xero in the top 15% of its industry — outperforming the majority of peers. The industry median FCF Margin % is 2.41. Xero's value of 12.55% is 420.7% above this benchmark. While the company's 10-year median is 6.91 vs. the industry median of 2.41, 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 FCF Margin % for a Software company?
The median FCF Margin % among Software companies is 2.41, based on 2,815 companies in the industry. Companies in the top quartile (top 25%) have a FCF Margin % significantly above this median, while those in the bottom quartile fall well below. However, FCF Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Xero's current FCF Margin % of 12.55% is 420.7% 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 FCF Margin % mean?
A high FCF Margin % can signal that a stock is expensive relative to its fundamentals. Free cash flow margin is the ratio of total free cash flow to net sales. View historical data on Xero and its competitors. For the Software industry, the median FCF Margin % is 2.41 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xero's current FCF Margin % is 12.55%, which is 82% above median its own 10-year median of 6.91. 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$195.57, compared to a current price of A$69.05 — trading 64.7% below its estimated fair value. The current FCF Margin % is 12.55%, which is 82% above median its 10-year median of 6.91 and 420.7% above the Software industry median of 2.41. Xero's overall GF Score™ is 81/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is FCF Margin % calculated?
FCF Margin % is calculated from a company's financial statements. For Xero (ASX:XRO), the current FCF Margin % is 12.55% 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$69.05 is trading 64.7% below its estimated GF Value™ of A$195.57.
GuruFocus considers Xero to be Possible Value Trap.
Key valuation signals for ASX:XRO:
FCF Margin %: 12.55% (82% above median its 10-year median of 6.91)
GF Value™: A$195.57 vs. price of A$69.05 (64.7% below fair value)
Industry Position: 420.7% above the Software median (#420 of 2815)
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.
81GF Score
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