** Accounting software maker Xero XRO.AX is nearing market saturation and likely to encounter challenging growth conditions in Australia and New Zealand - analysts at Jefferies and Morningstar
** Jefferies downgrades rating on Xero XRO.AX to "hold" from "buy"; raises PT to A$194.8 from A$185
** Company on Thursday reported FY25 adjusted EBITDA of A$640.6 mln, higher than last year but 2% below Visible Alpha consensus
** "XRO may sacrifice profitability in the short term to chase growth particularly in the U.S." - Jefferies
** "We expect the company will have to spend a larger share of its sales and marketing on replacing lost customers, further hampering growth" - Morningstar
** Jefferies cuts FY26 and FY27 EBITDA estimates for Xero by 11% and 5%, respectively
** Twelve out of 15 analysts rate the stock "buy" or higher, three rate it "hold"; their median PT is A$186.5, according to data compiled by LSEG
** Stock up 8% YTD, as at last close
(Reporting by Jasmeen Ara Shaikh in Bengaluru)
((JasmeenAraIslam.Shaikh@thomsonreuters.com;))
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.