Xero Share Price Down After Positive Earnings Update (ASX:XRO)

By ,

Today Xero Ltd [ASX:XRO], the online accounting and business software provider, announced its annual results and all signs point to a profitable year.

The Xero share price rose 11.36% from the previous low on 24 April, yet at the time of writing the price sat at $80.04, down just under 4%.

ASX XRO - Xero Share Price Chart 1

Optuma: Source

The growth of Xero

In a recent article we discussed the fortunes of Xero and how their products have been utilised throughout the COVID-19 pandemic. The annual results hold some revealing information on the company.

Xero noted that overall, usage levels have remained relatively steady during the 2020 calendar year, as measured by subscriber log in activity. With a lot of people working from home and Xero providing online accounting solutions, it matches up to the current climate of the COVID-19 pandemic that Xero would produce some good results.

This has seen Xero report a 30% increase in revenue.

CEO Steve Vamos noted:

In FY20 we continued to execute our strategy, delivering operational revenue growth of 30 percent driven by subscriber growth in all markets.’

What’s next from here…

Xero sits firmly in the top 100 stocks of Australia. Whilst posting wonderful results it can still be susceptible to market forces. Speaking in the market release, CEO Steve Vamos also noted:

Many of our customers and partners are having to adapt the way they operate, while investing enormous effort to survive at this difficult time.’

Taking a broader view, the [XJO] is experiencing a recovery, but this may be short term with this rise starting to taper off. For Xero this may also have the effect of a pullback in price should another drop in the market take place.

ASX XRO - Xero Share Price Chart 2

Source: Optuma

Taking a technical view, from the high in February to the low in March, the price has now retraced 78.6%, a Fibonacci number. This is also sitting at the historical resistance level of $82.62. If price were to continue to the upside, the previous all-time high of $90.22 may come into play.

Conversely should the price fall, levels of $74.53 and $67.23 may come into focus.

Here at Money Morning, we aim to give readers unique insights from across the market to help them make more informed investing decisions. Money Morning is a unique publication, that you can get direct to your inbox seven days a week. If that sounds like something you’d be interested in, then click here to learn more.


Carl Wittkopp,
For Money Morning

About Carl Wittkopp

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Xero [ASX:XRO] Shares Tank 10% on FY22 Results

Xero [ASX:XRO] shares plummeted on Thursday after they released their FY22 results.

Xero Share Price Falls on Half-Year Results (ASX:XRO)

The Xero [ASX:XRO] share price is down 6% on the release of the tech firm’s latest half-yearly.  Xero registered H1 revenue of $506 million from 3 million subscribers. XRO shares are currently trading at $138 a share.

Xero Misses the Mark in Its Full-Year Results — Shares Tanks (ASX:XRO)

On a rough day for investors, Xero (ASX:XRO) is faring worse than most.The accounting software developer’s share price trading 10.61% lower at the time of writing…

Is There Still Life in Small-Caps? — Some Exciting News

The chart tells you that small-caps aren’t dead. After the Morrison government effectively shouldered all the risk for loan guarantees, or at least 80% of it, there will be some ASX-listed small-cap beneficiaries…

What Next for Altium Share Price? (ASX:ALU)

We examine Altium Ltd’s [ASX:ALU] share price outlook after recent ASX tech sell-off. The last few months have not been kind to Altium and its share price. The ALU share price is down 22% …

Webjet Share Price Up on Government Support Package (ASX:WEB)

The Webjet Ltd [ASX:WEB] share price rose on news the government will support the domestic travel sector. The share price of Webjet Ltd [ASX:WEB] shares are down slightly by less than .7%, trading at $6.04…