XeroASX:XRO +1.77%81 PEG Ratio is 2.10 as of Jun. 27, 2026, which is 42% below its 10-year median of 3.64. 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 822 Software companies, Xero ranks worse than 68.37% on this metric.
PE Ratio without NRI / 5-Year EBITDA Growth Rate*
PEG Ratio is defined as the PE Ratio without NRI divided by the growth ratio. The growth rate we use is the 5-Year EBITDA growth rate. As of today, Xero's PE Ratio without NRI is 81.81. Xero's 5-Year EBITDA growth rate is 39.00%. Therefore, Xero's PEG Ratio for today is 2.10.
* The 5-Year EBITDA Growth Rate is the 5-year average EBITDA per share growth rate. While the denominator is a percentage, we use the whole number as opposed to the decimal form for the calculation. For example, 5% would be shown as 5 as opposed to 0.05. If it's smaller than or equal to 0, then the PEG Ratio is not calculated.
The historical rank and industry rank for Xero's PEG Ratio or its related term are showing as below:
ASX:XRO'
s PEG Ratio Range Over the Past 10 Years
Min: 1.55 Med: 3.64 Max: 4.99
Current: 2.1
During the past 13 years, Xero's highest PEG Ratio was 4.99. The lowest was 1.55. And the median was 3.64.
ASX:XRO's PEG Ratio is ranked worse than 68.37% of 822
companies
in the Software industry
Industry Median: 1.26
vs ASX:XRO: 2.10
Peter Lynch thinks a company with a P/E ratio equal to its growth rate is fairly valued.
Xero (ASX:XRO) PEG Ratio Explanation
To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the P/E ratio divided by the growth ratio. He thinks a company with a P/E ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a P/E of 20, instead of a company growing 10% a year with a P/E of 10.
Xero PEG Ratio Related Terms
Xero PEG Ratio Historical Data
* Premium members only.
The historical data trend for Xero's PEG Ratio 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 PEG Ratio, along with its competitors' market caps and PEG Ratio 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 PEG Ratio vs Software Industry
For the Software industry and Technology sector, Xero's PEG Ratio distribution charts can be found below:
* The bar in red indicates where Xero's PEG Ratio 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.
* Note: The 5-Year EBITDA Growth Rate is the 5-year average EBITDA per share growth rate. While the denominator is a percentage, we use the whole number as opposed to the decimal form for the calculation. For example, 5% would be shown as 5 as opposed to 0.05. If it's smaller than or equal to 0, then the PEG Ratio is not calculated.
Xero (ASX:XRO) has a PEG Ratio of 2.10 as of Jun. 27, 2026. Price-earnings to growth ratio is the ratio of price-earnings to a company's earnings growth rate. View historical data on Xero and its competitors. This is 42% below median its historical median of 3.64. Over the past decade, Xero's PEG Ratio has ranged from 1.55 to 4.99. According to the industry distribution chart, Xero ranks #562 out of 822 companies in the Software industry, placing it in the top 68.4%.
Is Xero's PEG Ratio too high?
Xero's current PEG Ratio of 2.10 is 42% below median its 10-year median of 3.64. Over the past 10 years, this metric has ranged from a low of 1.55 to a high of 4.99. The Software industry median PEG Ratio is 1.26. Xero's value of 2.10 is 66.7% above this industry median. Based on the distribution chart, Xero ranks #562 out of 822 companies in the Software industry, which is below the industry midpoint. 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 PEG Ratio compare to CRM and SHOP?
According to the Software industry distribution chart, Xero ranks #562 out of 822 companies for PEG Ratio. This places Xero in the lower half of its industry. The industry median PEG Ratio is 1.26. Xero's value of 2.10 is 66.7% above this benchmark. Historically, Xero's own PEG Ratio has ranged from 1.55 to 4.99 over the past decade. While the company's 10-year median is 3.64 vs. the industry median of 1.26, 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 PEG Ratio for a Software company?
The median PEG Ratio among Software companies is 1.26, based on 822 companies in the industry. Companies in the top quartile (top 25%) have a PEG Ratio significantly above this median, while those in the bottom quartile fall well below. However, PEG Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Xero's current PEG Ratio of 2.10 is 66.7% 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 PEG Ratio mean?
A high PEG Ratio can signal that a stock is expensive relative to its fundamentals. Price-earnings to growth ratio is the ratio of price-earnings to a company's earnings growth rate. View historical data on Xero and its competitors. For the Software industry, the median PEG Ratio is 1.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xero's current PEG Ratio is 2.10, which is 42% below median its own 10-year median of 3.64. 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 PEG Ratio is 2.10, which is 42% below median its 10-year median of 3.64 and 66.7% above the Software industry median of 1.26. 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 PEG Ratio calculated?
PEG Ratio is calculated from a company's financial statements. For Xero (ASX:XRO), the current PEG Ratio is 2.10 as of Jun. 27, 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:
PEG Ratio: 2.10 (42% below median its 10-year median of 3.64)
GF Value™: A$195.57 vs. price of A$69.05 (64.7% below fair value)
Industry Position: 66.7% above the Software median (#562 of 822)
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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