The Xero Limited (ASX: XRO) share price is on course to end the week in the red.
At the time of writing, the cloud accounting platform providerâs shares are down almost 1.5% to $85.93.
This means the Xero share price is now down over 40% since the start of the year.
What are brokers saying about the Xero share price?
In light of the poor performance from the Xero share price in 2022, investors may be wondering if it has created a buying opportunity.
The good news is that three leading brokers see value in its shares at the current level.
Hereâs what they are saying about Xero:
Citi currently has a buy rating and $108.00 price target on the company’s shares. This implies potential upside of almost 26% for investors. The broker was pleased with its recent price increases. It commented:
We see Xeroâs decision to increase prices in ANZ and UK as an indication of the companyâs confidence in its position in its core markets. While the changes would not have a full impact in FY23e, we estimate the changes represent a 8% uplift to group ARPU and represents upside to our ARPU forecasts. An increase in churn is a factor to consider especially given the slowing economic outlook
Over at Goldman Sachs, its analysts have a buy rating and $113.00 price target on its shares. This represents potential upside of 31% for the Xero share price. It said:
While noting that the near term remains robust, we do acknowledge the risk of higher churn from SME business challenges and recent price increases. Nevertheless, we see Xero as well-placed to navigate this uncertainty given the stickiness & importance of its software, and lower levels of churn vs. AU overall.
Finally, analysts at Morgans are bullish and recently initiated coverage on its shares with an add rating and a more modest $90.25 price target.
XRO has a significant runway for customer growth with <10% penetration of a 45m+ SMB Total Addressable Market (TAM). We see additional earnings upside from platform / ancillary value-added services and margin expansion.
The post What are brokers saying about the Xero share price? appeared first on The Motley Fool Australia.
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More reading
- Broker names 2 ASX tech shares to buy in July
- ASX 200 midday update: ANZ confirms MYOB talks, energy shares fall
- This broker sees 30% upside for the Xero share price over the next year
- Here’s why Goldman Sachs sees lots of value in the Xero share price
- Down 40% in 2022: Is the Xero share price a buy today?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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