ASX-listed Xero unlikely to improve US prospects post-Melio acquisition, Morningstar says
** Morningstar trims fair value estimate for Xero XRO.AX by 2% to A$100, citing material overvaluation
** Morningstar also notes a sizable fall in co's stock price after the announcement of the acquisition of U.S. fintech firm Melio Payments
** Xero is nearing market saturation in Australia and New Zealand, as evidenced by fast-deteriorating returns on sales and marketing spending there, Morningstar says
** Investment research firm expects fewer resources for more "winnable" international markets, given co’s heavy focus on the "unwinnable" U.S. market
** Adds that Melio's buyout will not materially improve co’s conversion or retention of customers
** 11 of 14 analysts rate the stock "buy" or higher, three rate "hold"; their median price target is A$205, per data compiled by LSEG
** Stock is down 3.9% YTD as of last close
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