Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We 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 more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 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, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Equity Bottom-Up

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 midsize enterprise, or SME, market in Australia and New Zealand. We expect the company to continue leveraging this strong position to expand quickly in other regions, such as the United Kingdom and the United States.Current losses are an acceptable price for rapid growth and associated strategic benefits, and we forecast a maiden profit in fiscal 2020. The capital-light business model should enable returns on invested capital, or ROIC, to comfortably exceed the weighted average cost of capital, or WACC, from 2020, supporting our narrow economic moat rating. We believe the shares offer value at current levels.Analysts: Gareth James, Andrew Lange, and Brian Colello

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 midsize enterprise, or SME, market in Australia and New Zealand. We expect the company to continue leveraging this strong position to expand quickly in other regions, such as the United Kingdom and the United States.Current losses are an acceptable price for rapid growth and associated strategic benefits, and we forecast a maiden profit in fiscal 2020. The capital-light business model should enable returns on invested capital, or ROIC, to comfortably exceed the weighted average cost of capital, or WACC, from 2020, supporting our narrow economic moat rating. We believe the shares offer value at current levels.Analysts: Gareth James, Andrew Lange, and Brian Colello 

Xero Ltd

Xero: Build It and They Will Come