The Xero Limited (ASX: XRO) share price has started the week in the red.
In morning trade, the cloud accounting platform providerâs shares are down 3% to $84.06.
Why is the Xero share price falling?
Investors have been selling Xero shares today amid broad weakness in the technology sector following the collapse of Silicon Valley Bank (SVB) on Friday.
This has led to the S&P/ASX All Technology Index falling 2.5% this morning.
As SVB has a strong presence in the sector, investors appear concerned what ramifications this will have on this area of the economy.
Xeroâs exposure
The good news is that Xeroâs exposure to the collapse of SVB is minimal.
This morning, the company attempted to ease investor nerves by revealing that âit does not have a material exposureâ to the collapsed bank.
It highlights the following:
As at 10 March 2023 Xeroâs total exposure to SVB was approximately $5m USD, reflecting Xeroâs local transactional banking relationships with SVB in the US and UK. That amount represents less than 1% of Xero’s Cash and Cash equivalents as at September 30 2022.
Is this a buying opportunity?
According to a note out of Morgans on Friday, its analysts are recommending that investors snap up Xero shares.
In response to its cost cutting plans, the broker has retained its add rating with an increased price target of $97.00. Based on the current Xero share price, this implies potential upside of over 15% for investors.
Morgans commented:
The focus has moved to reducing costs and driving disciplined growth. This means XRO now trades closer to a Growth At a Reasonable Price (GARP), where previously it was Growth At Any Price (GAAP). This realignment of investment priorities should open XRO to a much broader range of potential investors.
The post Xero share price dips 3% amid Silicon Valley Bank fallout appeared first on The Motley Fool Australia.
Should you invest $1,000 in Xero Limited right now?
Before you consider Xero Limited, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Xero Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
See The 5 Stocks
*Returns as of March 1 2023
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- These ASX tech shares have exposure to the Silicon Valley Bank collapse
- Top brokers name 3 ASX shares to buy next week
- Morgans names the best ASX 200 growth shares to buy in March
- Brokers name 3 ASX shares to buy now
- Is the new leaner, meaner Xero stock a buy right now?
Motley Fool contributor James Mickleboro has positions in Xero. 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.
from The Motley Fool Australia https://ift.tt/P1YX4sy
Stock Pick 