Morningstar sees UK as winnable opportunity for Xero despite controversy

Morningstar believes the UK remains a winnable and valuable market for accounting software provider Xero, despite recent social media controversy stemming from an influencer ad. The investment research firm noted that Xero may need to make accommodations, as accountants are increasingly sensitive to threats to their livelihoods from AI. Morningstar views Xero shares as undervalued, disagreeing with market beliefs that AI can replicate its software or disintermediate the accounting profession. Xero shares closed down 4.1% at A$62.78 on Friday, and are down 44.9% year-to-date.