2315 GMT [Dow Jones]--Xero still needs to demonstrate an ability to accelerate U.S. subscriptions growth if it is to turn Jefferies analyst Roger Samuel more positive on the stock. Samuel points out that the accounting software provider's shift toward payments in the U.S. exposes it to a model with less recurring revenue than its core subscription business. Payments' performance is linked to economic cycles, he tells clients in a note. Xero's Melio payments unit is far more profitable on a per-customer basis, but its cyclical nature makes it lower quality, he adds. Jefferies cuts its target price 26% to A$100.70 and keeps a hold rating on the stock, which is down 12% at A$84.15. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

February 03, 2026 18:16 ET (23:16 GMT)

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