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