
Xero Ltd (ASX: XRO) shares are edging higher today.
Shares in the $19 billion S&P/ASX 200 Index (ASX: XJO) business and accounting software provider closed yesterday trading for $113.36. In morning trade on Friday, shares are changing hands for $113.57, up 0.2%.
For some context, the ASX 200 is up 0.8% at this same time.
As you may know, Xero shares have come under heavy selling pressure since the ASX 200 tech stock notched a new all-time closing high of $194.21 on 24 June.
But according to Catapult Wealth’s Blake Halligan, that sell-off looks to be short-sighted, with the outlook for growth in 2026 looking promising (courtesy of The Bull).
Should you buy Xero shares today?
“XRO is a global accounting software provider,” said Halligan, who has a buy rating on Xero shares.
“Average revenue per user was up 15% in the first half of (FY) 2026 when compared to the prior corresponding period. EBITDA was up 21%,” he said, citing the first reason the ASX 200 tech stock could be set for a strong rebound.
“Rolling out bank feed connections in the United States will be a tail wind moving forward,” he added.
And the third reason you might want to buy some Xero stock for Christmas is that following the past six months of selling, shares could be trading at a long-term bargain.
“In our view, the recent fall in the share price reflects a short-sighted assessment of revenue and subscriber growth rates,” Halligan said.
“The US payments opportunity is significant, and any signs of successful execution and acceleration in growth will drive a meaningful re-rate,” he concluded.
What’s happening with the company’s US expansion?
As Halligan mentions, Xero shares could garner significant longer-term support from the company’s growth ambitions in the world’s largest economy.
At Xero’s half-year results release on 13 November, the company stated:
In June, Xero announced it had agreed to acquire Melio, a leading US SMB bill pay platform that seamlessly enables customers to manage their cash flow by offering SMBs and their advisors easy-to-use accounts payable (A/P) workflows and a wide choice of payment methods.
That acquisition was completed in mid-October, which the company said now gives it an opportunity to accelerate integration and deliver value for its US customers sooner.
Management noted that Melio traded in line with expectations through the first half of FY 2026, achieving underlying revenue growth of 68% to NZ$183 million.
The post 3 reasons to buy Xero shares today appeared first on The Motley Fool Australia.
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More reading
- Insiders are buying Xero and these ASX shares this month
- Opportunity knocks? Broker ratings on 4 ASX shares at 52-week lows
- When a top ASX stock falls 30%, it gets my attention. Here’s why
- Buy, hold, sell: Medibank, Qantas, and Xero shares
- Stocks to target for a tech rebound in 2026
Motley Fool contributor Bernd Struben 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.






