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Xero (XRO), would you buy now if you didn’t hold?

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Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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    Question asked

    Xero (XRO), would you buy now if you didn’t hold?

    Thanks MM for your regular updates and insightful commentary. I bought Xero sometime ago on a MM recommendation but sold last year after a reasonable increase. My logic at the time was that I thought the price may plateau or drop but the opposite has happened with very strong results lately. If you weren't holding now would XRO be a buy? Regards Peter

    Answer

    Hi Peter,

    An interesting question because the answer comes with a couple of caveats:

    • We believe XRO is a world class company but after its 36% bounce from its April low its definitely not in bargain territory, especially for a stock that does often retrace ~20%.

    Our answer all comes down to timeframes, although we are fans of XRO believing it to be a quality stock as its recent result showed:

    • We are bullish XRO through 2025 looking for a test of $200 – about 10% higher.
    • However we would not be surprised if investors got another opportunity to buy XRO around $150 in the next 1-2 years.

    Hence our answer is a convoluted yes as a short term play but its not a great levels to “Buy & Hold”.

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    Xero Ltd (XRO)
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