The Xero Ltd (ASX: XRO) share price has been one of the worst performers in the S&P/ASX 200 Index (ASX: XJO) in recent history. In the last year alone (at the time of writing), the Xero share price has dropped more than 60%, as the below chart shows.

As an accounting software business, Xero has been one of the victims of the big decline in investor confidence surrounding software companies.

But, I think the business has been significantly oversold, and now looks very good value for three reasons.

Ongoing revenue growth

Firstly, the decline in the share price suggests a bleak future. However, while we can’t know for certain what the future holds (positively or negatively), revenue (and subscriber) numbers remain solid because of a few different elements.

The company recently reported its FY26 results for the 12 months to 31 March 2026. Its customer numbers grew 11% to 4.92 million. Growth is accelerating – its net customer additions (excluding removed long idle subscriptions) improved by 22% to 506,000. That’s a lot of extra revenue flowing through the business!

Its average revenue per user (ARPU) continues to grow thanks to regular price hikes, which isn’t materially hurting the loyalty of subscribers. ARPU rose 23% to $55.44 during the FY26 period.

Those subscribers likely see the huge time-saving and efficiency tools Xero provides as a great benefit. Time-poor business owners (and accountants and bookkeepers) want to complete tasks as quickly as possible.

Thanks to those revenue growth benefits, its annualised monthly recurring revenue (AMRR) jumped 37% to $3.27 billion, and the total lifetime value (LTV) of customers increased 17% to $21 billion.

US expansion

Xero has built a significant market position in New Zealand, Australia and the UK. It also has a growing presence in countries like Singapore, South Africa and Canada.

However, it has struggled to gain much of a foothold in the US, which is a huge market if Xero can get it right. It’s difficult to break into a market that already has such embedded incumbents.

The acquisition of small and medium business payments company Melio may have been costly, but it could unlock the growth and access to more subscribers that Xero has hoped for.

In FY26, it reported US revenue growth of 240% (30% on an organic basis, excluding Melio). If it can continue to grow US revenue in the double digits, I think it has a very good future.

Long-term profit potential

Profitability took a hit in FY26 due to Melio-related acquisition costs, but I think the long-term outlook looks very promising for continued profit growth in the coming years.

As a software business, the company has a lot of operating leverage – its revenue can increase at a much faster pace than its expenses, in a normal financial year.

As revenue continues to grow, I expect earnings to grow quickly. Despite profit headwinds in FY26, free cash flow increased 9% to $554 million. The company can use the rapidly rising cash flow to pay dividends and/or make more bolt-on acquisitions.

For me, long-term profit growth is the key reason I’m interested in the Xero share price.

I think Xero is a very exciting ASX share to own, though it’s not the only stock I’d buy today.

The post 3 reasons why the Xero share price is a buy in July appeared first on The Motley Fool Australia.

More reading

• The Nasdaq just had its worst week in months. Here’s what that means for ASX tech stocks
• Buy, hold, sell: Woodside, Xero, BHP shares
• How to invest $500, $5,000, and $50,000 on the ASX
• Why I’d buy Xero and Block shares with $2,000
• Is the tech recovery finally here for Xero and Wisetech shares?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Pro Medicus Ltd (ASX: PME) share price has been an incredible performer over the last five years, rising by 230%. The Australian stock’s return would have been much stronger if the end date of this measure had been July 2025, as it was above $330 at that stage.

As the above chart shows, it’s actually down 40% since that July 2025 peak. So, after significant volatility over the past year, is it good value or overvalued?

Let’s take a look at what analysts think of the business at its current valuation.

Expert views on Pro Medicus shares

According to CMC Invest, there have been 10 analyst ratings on the business. Of those ratings, nine were buys, and one was a hold.

Clearly, investors are feeling very positive about the business right now, though it has already regained some of its lost ground after rising more than 40% over the last month.

Experts still think the Pro Medicus share price could rise from here. The average price target of those 10 ratings is $203.15. That suggests it could rise more than 7% in the next year.

The most optimistic price target is $245.13, suggesting it could rise another 30% from where it is at the time of writing.

Why is the Australian stock still attractive?

The business has continued to deliver excellent financials for shareholders, which is the only thing Pro Medicus can truly control.

Its operating profit (EBIT) remains one of the highest on the ASX. This means much of the new revenue it’s winning is turning directly into usable EBIT that can help grow the bottom line, pay larger dividends, and/or strengthen the balance sheet.

The company continues to win new and renew existing contracts from valuable clients, giving it tailwinds for shareholder returns.

Additionally, Pro Medicus continues to strive to offer the best service, which is why it recently announced it’s exploring a partnership with EchoIQ Ltd (ASX: EIQ) to provide Pro Medicus customers with AI-powered cardiovascular diagnostic technology. Cardiology could be a great growth avenue for Pro Medicus.

The company’s earnings per share (EPS) is expected to continue rising at a strong pace. According to Commsec’s forecast, the business is projected to grow EPS by around 30% in FY27 and by another 25% in FY28.

Can any other very profitable S&P/ASX 200 Index (ASX: XJO) share grow EPS as much in percentage terms between FY26 and FY28? Time will tell, but I think the Australian stock has a very promising future.

The post Up 230% in 5 years! Is this still a top Australian stock to buy? appeared first on The Motley Fool Australia.

More reading

• How to invest $500, $5,000, and $50,000 on the ASX
• Is this exciting ASX tech stock a buy after its massive news?
• Pro Medicus just struck a revolutionary AI cardiology deal. Here’s why that matters
• Why is everyone talking about Mineral Resources, A2 Milk and Pro Medicus shares on Thursday?
• Why A2 Milk, EchoIQ, Lendlease, and Qantas shares are racing higher today

Motley Fool contributor Tristan Harrison has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I believe investors are much more likely to see good returns by owning ASX shares over the long term.

But, there aren’t many investments I’d commit to owning for 10 years, let alone 60 or 70 years.

There are a few names I expect to own for a very long time. I’ve already owned the two below ASX share for many years and I expect they’ll be in my portfolio for decades to come.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland across Australia.

Farms have been an essential part of life for many centuries, and I think that will continue to be the case for a very long time to come.

Rural Funds is invested across a variety of farming sectors. I like the diversification strategy of the business because it lowers the risk of being too exposed to one type of farm and allows it to find the best opportunities it can for a combination of rental income and growth.

The business has long-term rental agreements signed with high-quality agricultural producers. The weighted average lease expiry (WALE) is currently over a decade, indicating compelling rental visibility and security.

Its rental income is steadily growing thanks to contracted increases, either linked to inflation or fixed annual increases, plus market reviews.

One of the main reasons this seems like such a good time to invest is that the business is trading at a significant discount to its net asset value (NAV) – the underlying value of the business, including property values, loans, and so on.

At 31 December 2025, it had an adjusted NAV of $3.10. At the time of writing, it’s trading at a discount of around 33%.

As a final bonus, it offers good passive income – it currently has a distribution yield of 5.6%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is another ASX share I expect to deliver excellent longevity. It has already been listed for 120 years, and I think it’ll excel for decades to come.

The investment house has a very diversified portfolio of assets and businesses. Having a flexible investment mandate allows the company to steadily change its asset base over the years, giving the business the ability to future-proof itself.

In 20 years, its main investments could be extremely different, but the business will still have the same level of attraction to me. Management is always looking for ideas that can generate defensive cash flow and deliver long-term capital growth.

Currently, some of its biggest investments include energy, sources, property, swimming schools, agriculture, electrification, credit and plenty more.

Soul Patts has outperformed the S&P/ASX 200 Index (ASX: XJO) over the long-term, and I expect that to continue as the business further adjusts its portfolio.

One of the main reasons I like it so much as an investment is its excellent track record of dividend growth. It has increased its regular payout every year since 1998. That’s the most consistent dividend growth record on the ASX.

The post 2 ASX shares I plan to own until I’m 100 appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares I’d buy and hold for my kids
• Where should I invest inside SMSFs instead of property?
• How to invest $500, $5,000, and $50,000 on the ASX
• Want a pay rise? These ASX dividend shares keep delivering
• 3 ASX dividend favourites are hitting 52-week highs today. Are investors getting defensive?

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Rural Funds Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.