Morningstar | Xero is expanding beyond Australia and New Zealand into North America, the U.S. and Asia.
Xero has grown quickly since incorporation in 2006 to become the largest provider of accounting software as a service, or SaaS, to the small and medium enterprise, or SME, market in Australia and New Zealand. We expect the company to continue to leverage this strong position to expand quickly in other regions such as the United Kingdom and the United States. Current losses are an acceptable price to pay for rapid growth and associated strategic benefits and we forecast a maiden profit in fiscal 2019. The capital-light business model should enable returns on invested capital, or ROICs, to comfortably exceed the weighted average cost of capital, or WACC, from fiscal 2019, supporting our narrow economic moat rating.Xero is engaged in the provision of a platform for online accounting and business services to small businesses.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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