Xero Shares Close Week Strong, Testing Key Moving Average

Xero shares (ASX: XRO) closed 4.78% higher today at A$85.64, hitting an intraday high at A$89.54 on a solid day for bulls. The rally landed barely 24 hours after a bruising annual meeting at which more than 70% of shareholders voted against the remuneration report, delivering a second strike over chief executive Sukhinder Singh Cassidy’s pay package.

It was a week of chop for XRO holders, with the technical setup having looked overheated early, only to cool off ahead of Friday’s bounce. With the RSI cooling from 76.85 to sit at 62 after this latest leg higher, Xero’s share price has also managed to close the week out higher, up 0.75%. A test at a break above the 200day SMA of A$86.58 fell short of holding, leaving plenty for both sides to take from the week.

With the protest vote crystallised rather than looming, that has cleared one potential obstacle. Chair David Thodey publicly defended the pay decision at the AGM, benchmarking the package against US tech peers while acknowledging shareholder frustration over its timing and structure. That combination of defiance and concession can read as a board forced onto a more shareholder-sensitive footing, which paradoxically reduces long-term governance risk in the eyes of buyers willing to look through the noise.

Underneath the governance theatre, the operating story has been doing the heavy lifting.

Xero’s FY26 results showed operating revenue up 31% to NZ$2.75 billion and adjusted EBITDA up 18% to NZ$757 million, with customer numbers near 4.92 million and growth sustained across ANZ, the UK and an accelerating US business. Management’s FY27 outlook points to adjusted EBITDA of NZ$860 million to NZ$920 million on revenue of NZ$3.62 billion to NZ$3.73 billion, with early monetisation of AI features and a deliberate second-half weighting. Xero also reiterated its FY28 aspirations and guidance for the Melio payments acquisition to reach breakeven, with the combined business expected to significantly accelerate US revenue.

The stock has rebounded 39% from its late-July low close of A$61.58, yet remains down 23.71% year-to-date. That leaves room for momentum traders, short covering and underweight funds to chase a recovery that is still well below prior highs. A firm broader tape and renewed appetite for AI-enabled software names across the ASX technology sector provided a supportive backdrop, and Xero’s beta of 2.22 versus the ASX 200 means it tends to exaggerate exactly this kind of rotation.

The Setup at XRO

The average price price on XRO shares at A$125.38 implies roughly 41.5% upside from today’s print, with most brokers rating the stock a buy or strong buy.

The technical readings fit a continuation rather than a fresh breakout, with that A$90 level the next big line in the sand. An ADX of 35.43 confirms a strong established trend, though with the reading falling, the trend is no longer intensifying, consistent with a stock that has taken a moment to cool off.

With software names Stateside doing well overnight (CRM up 22.58%, HUBS up 7.91%, NOW up 10.01%), some of the sector momentum helped push ASX tech names on the day, and another positive week in the bag for Xero sets things up nicely for the upcoming week. Cooled technicals, a test of the 200 day SMA that closed below, and a 22.34% gain month to date give bulls plenty to cheer. That rejection before A$90, and at the 200 day moving average that has provided a ceiling in recent sessions gives bears a case.

Xero shares: Green=200 day SMA, Blue=30, Red=50

Bull Case: