Is the Xero (ASX:XRO) share price on the way back up to its January highs?

Shares in Xero Limited (ASX: XRO) are walking higher today and now trade 2% in the green at $100.96 apiece.

ASX tech shares have staged a sharp comeback rally in recent weeks as a wave of macroeconomic crosscurrents feed into global markets.

The S&P/ASX All Technology Index (ASX: XTX) is up 2% on the day and has charged 9% higher this past week as investors rotate back into high-beta tech shares.

Market pundits appear satisfied to take on risk in going long tech names once more as the US Fed provides more clarity on interest rates, and as the Chinese government promised to keep its stock markets stable, Barrons reports.

What does this mean for the Xero share price?

As growth returns as a profitable investment theme in the back end of March, tech shares such as Xero could benefit immensely, some say.

According to Ben Clark Portfolio Manager at TMS Capital, Xero is one to look for once the market begins to trudge back north and the economy begins to settle.

“[Xero] has been one of our largest holdings, didn’t report in the reporting season. It’s such a resilient, consistent business. I don’t think you’re going to get any bad news from it,” he said when speaking to Livewire.

Clark encourages market participants to think critically when analysing stocks like Xero, avoiding themes like ‘hold on for dear life (HODL)’ or ‘buy and leave’ in the process.

“It’s [Xero] dropped 40% from its January one high,” the portfolio manager remarked. “So don’t put the blinkers on and think, “Oh, I’ve just got to hold tight.” You still do have to think, is this a business that’s going to come back when the market comes back?”

And will it come back, Mr Clark? And what will happen if and when it does? These are important questions, that thankfully, the money manager has the answers to.

“The market will come back,” he told Livewire. “When growth starts to run, the businesses that reported really strongly in February, and it was just completely ignored, will be the first businesses to roar back.”

Analysts at JP Morgan agree, noting Xero’s strength as a market leader in cloud accounting to be a key driver for growth into the future.

“We believe XRO remains well positioned to capture the growth from increasing cloud penetration across cloud accounting,” it said in a note last week.

“XRO has proven its credentials in the ANZ marketand is now looking to replicate its model in its international markets,” it added.

Xero share price snapshot

In the last 12 months, the Xero share price has fallen more than 16% into the red and is now more than 28% in the red this year to date.

Over the past week and month, things have turned a corner, such that shares are now 8% and 2% in the green respectively.

The post Is the Xero (ASX:XRO) share price on the way back up to its January highs? appeared first on The Motley Fool Australia.

More reading

• Are these 2 ASX tech shares excellent buys right now?
• Brokers name 2 excellent ASX shares to buy and hold
• Guess how much $5,000 invested in Xero (ASX:XRO) shares 10 years ago would be worth now
• Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022
• ASX 200 (ASX:XJO) midday update: Block falls, Nickel Mines jumps

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/Khi1tHv