Author: therawinformant

The Recce Pharmaceuticals Ltd (ASX: RCE) share price has come under pressure on Wednesday after returning from its trading halt.

The pharmaceutical company’s shares crashed as much as 15% lower to $1.38 this morning.

They have since recovered the majority of this decline but are still down over 3% to $1.58 at the time of writing.

Why is the Recce share price sinking lower today?

Investors have been selling Recce’s shares after it completed a placement of shares to institutional, professional and sophisticated investors.

The company raised a total of approximately $28 million before costs at an issue price of $1.30 per share. This represents a sizeable 20% discount to its last close price.

Why is Recce raising funds?

Recce launched the capital raising in order to fund the advancement of its synthetic anti-infective pipeline.

This comprises the RECCE 327, RECCE 435 and RECCE 529 compounds which are addressing the urgent global health problems of antibiotic resistant superbugs and emerging viral pathogens.

The company notes that there will be additional financial support from the Australian Government’s 43.5% R&D rebate on R&D applicable activities.

This ensures it is fully funded to complete its Phase I human clinical trial, SARSCoV-2 (COVID-19) pre-clinical program, Helicobacter pylori preclinical program, and the anticipated Phase I/II topical study at a leading Australian teaching hospital.

Recce’s Chief Executive Officer, James Graham, commented: “We greatly appreciate the support shown by both our existing investors and new institutional investors. Their financial support comes at a transformative time for Recce as we prepare to advance human clinical trials. We welcome all new investors and look forward to updating the market as our pivotal trials progress in the coming months.”

There certainly is a lot of optimism around these compounds. Despite its share price weakness today, the Recce share price is up over 360% since the start of the year.

The coming months will soon reveal whether investors were right to back this one.

More reading

• Why Kathmandu, New Hope, Recce, & Ramelius shares are dropping lower today
• These 4 ASX shares have grown more than 100% this year
• Turn $6k into $60k, a guide to growth investing
• Why the DroneShield (ASX:DRO), BrainChip (ASX:BRN) and Recce (ASX:RCE) share prices are rising today
• Why BrainChip (ASX:BRN) and Recce (ASX:RCE) shares just hit record highs

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Nufarm Limited (ASX: NUF) share price has surged 7.69% to $4.48 in morning trade. This comes after the company released its FY20 results today.

This compares with the S&P/ASX200 Index (ASX: XJO) which is also up, 1.9% to 5,892 points.

Let’s see how the Nufarm share price performed in its full-year for 2020.

How did Nufarm fare in FY20?

Nufarm reported mixed results for the financial year ending 31 July 2020. The crop protection and specialist seeds company delivered revenue of $2,847 million. This was a 7% uplift on FY19, underpinned by a strong second-half momentum across Australia, New Zealand (ANZ) and North America.

Nufarm’s recorded a statutory net loss after tax of $362 million. This was attributed to weak seasonal conditions faced in the first 6 months and the effects of COVID-19.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $236 million, down 21%. Reduced earnings in Europe, seed technologies and North America for 1HY20 offset growth in ANZ and Asia.

The company’s underlying net operating cash flow from continued operations increased by $137 million. This was primarily due to Nufarm’s improved working capital management which more than covered the loss of incoming revenue.

Cash on hand was at $687 million with further undrawn facilities of $648 million should Nufarm need to access these funds.

The company has continued to suspend all dividends until further notice.  The board will revisit this decision in future based on the prevailing market conditions.

What did management say?

Nufarm CEO Greg Hunt acknowledged the difficult trading conditions. He said:

2020 has been an extraordinary year. The agricultural markets in which we operate across the globe have endured mixed seasonal conditions, industry-related supply issues and of course the tragedy and disruption of COVID- 19.

Mr Hunt said decisive steps had been taken to strengthen the business and improve returns. He added.

We have refocused our portfolio, strengthened our balance sheet and progressed key priorities to drive better performance from our continuing businesses. 

The successful completion of the sale of the South American businesses in April 2020 delivered up-front value for shareholders and has refocused our portfolio on the businesses and regions with higher margins and stronger cash flow.

The sale proceeds strengthened our financial position to allow us to better manage inherent industry volatility.

FY21 outlook for the Nufarm share price

Nufarm is working to improve cash generation and deliver an earnings recovery for its Europe operation. In addition, the company will look to continue the positive sales momentum in its North America and Asia Pacific regions.

The board is projecting net external costs to be in the range on $75–$85 million, excluding foreign exchange gains and losses.

Furthermore, depreciation and amortisation are predicted to be approximately $220 million, and capital expenditure at $180 million.

The company noted that this month, it had secured its first commercial sales and forward orders of its omega-3 canola oil to a major global salmon producer. This product is expected to yield significant value in the coming years.

The company will provide a trading update on 19 November and in its annual general meeting on 18 December.

The Nufarm share price is down by more than 27% from the beginning of the year. Today’s result will offer some relief to shareholders as the Nufarm share price has not recovered anywhere near its highs above $9 since 2018.

More reading

• Why Afterpay, Nufarm, PolyNovo, & Sezzle shares are racing higher today
• ASX 200 up 1.9%: Afterpay storms higher, Nufarm jumps, big four banks rise
• Why the Xero (ASX:XRO) share price can hit $100 again in 2020
• Correction or crash for ASX 200 shares?
• Is the Coles (ASX:COL) share price a buy after renewable energy deal?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Nufarm (ASX:NUF) share price has rocketed today appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) is back in form at last on Wednesday and is charging notably higher. The benchmark index is currently up 1.8% to 5,888.6 points.

Four shares that have climbed more than most today are listed below. Here’s why they are racing higher:

The Afterpay Ltd (ASX: APT) share price has stormed 4% higher to $79.71. Investors have been flooding into the tech sector on Wednesday after their U.S. counterparts stormed higher on Wall Street overnight. This has led to the S&P/ASX All Technology Index (ASX: XTX) charging a sizeable 2.8% higher at the time of writing.

The Nufarm Limited (ASX: NUF) share price has jumped 8% to $4.50 following the release of its full year results. Although the agricultural chemicals company reported a statutory net loss after tax of $456 million, its outlook has got investors excited. Nufarm advised that it is emerging from a period of sustained headwinds and positive momentum has continued with good revenue growth from continuing businesses in August.

The PolyNovo Ltd (ASX: PNV) share price is up 2.5% to $2.25. Investors have been buying the medical device company’s shares after it provided an update on its European operations. PolyNovo advised that it has appointed Helsinki based Innova Medical Oy to sell its NovoSorb Biodegradable Temporising Matrix (BTM) product in Finland. NovoSorb BTM is a dermal scaffold for the regeneration of the dermis when lost through extensive surgery or burn. Management expects more European market entries in the near future.

The Sezzle Inc (ASX: SZL) share price has risen 5% to $6.81. This follows the announcement of a partnership with Ally Lending that will give Sezzle merchants and shoppers access to long term financing options. Management believes this complements its existing short-term, interest-free offering, without adding any balance sheet impact to Sezzle. Ally Lending provides monthly fixed-rate instalment-loan products that extend up to 60 months in length and US$40,000 per instalment plan.

More reading

• Why the Nufarm (ASX:NUF) share price has rocketed today
• ASX 200 up 1.9%: Afterpay storms higher, Nufarm jumps, big four banks rise
• PolyNovo (ASX:PNV) share price higher on European update
• Where next for the Zip (ASX:Z1P) share price?
• Why the Xero (ASX:XRO) share price can hit $100 again in 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is back on form and on course to record a strong gain. The benchmark index is currently up a massive 1.9% to 5,893.4 points.

Here’s what has been happening on the market today:

Tech shares surge higher.

Tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) have been in fine form on Wednesday and are playing a key role in the ASX 200’s strong gain. This follows a very positive night of trade on the tech-focused Nasdaq index overnight. The gains in the local tech sector have been so strong that the S&P/ASX All Technology Index (ASX: XTX) is charging a sizeable 2.8% higher at lunch.

Nufarm results.

The Nufarm Limited (ASX: NUF) share price is storming higher on Wednesday following the release of its full year results. As expected, the agricultural chemicals company reported a massive statutory net loss after tax of $456 million. However, the good news is that Nufarm appears to be over the worst of its issues now. Management advised that the company is emerging from a period of sustained headwinds. It also notes that positive momentum has continued with good revenue growth from continuing businesses in August.

Bank shares rise.

Also helping to drive the ASX 200 higher on Wednesday are the big four banks. All four banks are pushing notably higher today, with the National Australia Bank Ltd (ASX: NAB) share price leading the way. NAB’s shares are the best performers in the group with a 2.5% gain.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Wednesday is the Service Stream Limited (ASX: SSM) share price with a 12% gain. This appears to be related to the announcement of a $3.5 billion NBN fibre to the home extension plan. Service Stream has been helping with the NBN rollout. The worst performer has been the Ramelius Resources Limited (ASX: RMS) share price with a 6% decline. Improving investor sentiment appears to be weighing on safe haven assets.

More reading

• Why the Nufarm (ASX:NUF) share price has rocketed today
• Why Afterpay, Nufarm, PolyNovo, & Sezzle shares are racing higher today
• Why Kathmandu, New Hope, Recce, & Ramelius shares are dropping lower today
• Where next for the Zip (ASX:Z1P) share price?
• Why the Xero (ASX:XRO) share price can hit $100 again in 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a very strong gain. At the time of writing the benchmark index is up 1.6% to 5,878.5 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Kathmandu Holdings Ltd (ASX: KMD) share price has dropped 3% to $1.14. This follows the release of the retailer’s full year results this morning. For the 12 months ending 31 July 2020, Kathmandu reported a 48.7% increase in sales to NZ$801.5 million. This was driven largely by a nine-month contribution from the acquired Rip Curl business. Management revealed that COVID-19 impacted sales by an estimated NZ$135 million in FY 2020.

The New Hope Corporation Limited (ASX: NHC) share price has fallen 3% to $1.17. Investors have been selling the coal miner’s shares after brokers responded negatively to its full year results. One broker that didn’t like what it saw was Macquarie. This morning it retained its underperform rating and cut its price target down to 90 cents. On Tuesday New Hope posted a 17% decline in revenue to $1,084 million and a 69% decline in profit after tax to $120 million.

The Recce Pharmaceuticals Ltd (ASX: RCE) share price has dropped a sizeable 7% to $1.52. This follows the completion of a placement to raise ~$28 million. The pharmaceutical company raised the funds through the placement of 21.5 million shares to institutional, professional, and sophisticated investors at a sizeable discount of $1.30 per share. Proceeds will be used to advance Recce’s synthetic anti-infective pipeline.

The Ramelius Resources Limited (ASX: RMS) share price is down 6.5% to $2.18. Investors have been selling Ramelius and other gold miners on Wednesday after improving investor sentiment weighed on demand for safe haven assets. The spot gold price is currently down 0.2% to US$1,903.60 an ounce according to CNBC.

More reading

• Kathmandu (ASX:KMD) share price on watch after FY 2020 results
• ASX 200 falls 0.7%, UK and travel shares drop
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Why Jumbo, New Hope, Northern Star, & Qantas shares are dropping lower
• New Hope (ASX:NHC) share price sinks lower on FY 2020 results

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Investors are underestimating the ability of Apple Inc‘s (NASDAQ: AAPL) wearables business to fuel its growth.

So says Citi analyst Jim Suva. On Monday, Suva reiterated his buy rating on Apple’s shares and lifted his price forecast from $112.50 to $125. His new target represents potential rewards for shareholders of approximately 13% from the stock’s current price near $110.

Suva says Apple’s wearables sales will push the company’s stock higher as people spend more on tech gear with health-tracking features. “Apple continues to make inroads into healthcare devices market which we view as a positive move for attracting and engaging their users to their products, given the importance of such features by individuals,” Suva said. 

Moreover, despite reported delays, Suva predicts Apple will launch its much-awaited iPhone 12 in time for the holiday shopping season. 

Is Apple’s stock price headed to $125?  

The iPhone 12 is expected to be the tech titan’s first 5G-enabled smartphone. The fifth-generation wireless technology could help to ignite a massive upgrade cycle among current iPhone owners, in addition to bringing new customers into Apple’s burgeoning ecosystem of devices and services.

Wearables, led by the Apple Watch, are likely to become an increasingly important part of this ecosystem, as Suva notes. The coronavirus pandemic has placed health front and centre in the minds of people around the world, and Apple has wisely ramped up its health-focused technologies in its devices. 

This all bodes well for strong sales of Apple’s iPhones, watches, and services, which could easily drive its stock above $125 in the months ahead.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Warren Buffett’s 3 best-performing stocks so far this year: Are they buys now?
• ASX technology stocks to buy during this global tech sell-off
• Apple (NASDAQ:AAPL) stock will soar 24% to $140, according to this analyst
• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today
• Apple, Amazon, Microsoft are bigger than EVERY unicorn combined

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The PointsBet Holdings Ltd (ASX: PBH) share price has cooled down to a 50% increase since its game changing partnership with NBCUniversal. Has the market already priced in the company’s potential or is there still an opportunity to hop onboard the PointsBet share price? 

PointsBet front and centre 

PointsBet is partnering with one of the most iconic and trusted media brands in the United States with the largest sports audience. Its broadcast network reaches all US TV households and its regional sports networks are well positioned in legalised sports betting markets. The partnership will involve US$393 million marketing spend from PointsBet in progressively increasing amounts over the 5-year media partnership. NBC will also receive incentives for customer referrals and issued skin in the game with a 4.9% interest stake in PointsBet. The partnership, marketing spend and interest stake value the deal at nearly US$500 million. 

Is the PointsBet share price valuation an issue? 

The partnership has seen PointsBet balloon to a $1.8 billion valuation on just $75 million revenue in FY20. The revenue to market capitalisation valuation is similar to many buy now, pay later companies. Despite the ballooning valuation, I don’t see this as an issue. The PointsBet share price should continue to improve dependent on its ability to secure key sports betting access, partnerships and key performance milestones. Its recent capital raising places the company in a strong position to pursue growth opportunities and marketing spend to acquire customers and market share in the US. Conversely, the lack of announcements could see interest and sentiment drop for the PointsBet share price. Much like buy now, pay later companies that soared in July and August following announcements such as new SME credit products and expanding into new geographies, the recent lack of news has seen share prices come back to earth. 

A significant market opportunity 

The US sports betting market is a significant revenue opportunity. Investment banks Morgan Stanley and JPMorgan Chase & Co. have both estimated the potential combined online and retail sports betting market to be worth approximately US$12 billion by 2025. 

More recently, the state of New Jersey has seen a V-shaped recovery in sports betting turnover. The state set a new monthly record for any US jurisdiction permitting legal wagering with US$668 million of wagers in the month of August. This clears the previous record by more than US$100 million. From a bookmaker perspective, sportsbooks won US$39.5 million of the dollars wagered, or approximately 5.9% of turnover. 

Foolish takeaway

PointsBet is cashed up with a game changing partnership under its belt. This should see a significant improvement in its ability to acquire customers and gain market share in the US. The restart of major sports leagues in the US should see an improvement in market conditions and betting volumes. However, PointsBet will need to continue to step into new states to scale the opportunity at hand. The current volatility in the general market is a risk for the PointsBet share price, but I don’t see the company has being overvalued either. 

More reading

• PointsBet (ASX:PBH) share price higher on U.S. expansion news
• Should you buy the PointsBet (ASX:PBH) share price after its capital raising? 
• Why Accent, Afterpay, Nine, & PointsBet shares are dropping lower today
• Why the PointsBet (ASX:PBH) share price tumbled 21% lower today
• Top ASX growth shares to buy in September 2020

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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In morning trade on Wednesday the PolyNovo Ltd (ASX: PNV) share price is pushing higher with the market.

At the time of writing the medical device company’s shares are up 1.5% to $2.22.

This latest gain means the PolyNovo share price is up a very solid 19% year to date despite the pandemic.

Why is the PolyNovo share price pushing higher today?

Investors have been buying the company’s shares this morning after it announced the appointment of a distributor in Finland.

According to the release, the company has appointed Helsinki based Innova Medical Oy to sell its NovoSorb Biodegradable Temporising Matrix (BTM) product in Finland.

NovoSorb BTM is a dermal scaffold for the regeneration of the dermis when lost through extensive surgery or burn. It can be used to temporarily close the wound and aid the body in generating new tissue.

In addition to the above, management advised that there have already been four surgical applications of NovoSorb BTM in the country with three surgeons on a chronic leg stump wound, burns, and also scar revision.

Positively, the surgeons have reportedly reached skin graft closure stage on two of these with excellent results to date.

The company’s Managing Director, Paul Brennan, was pleased with the news and expects it to boost sales in the continent in the near future.

He said, “The Innova Medical Oy team have been engaged with us for some time. The evaluation surgeries were completed with donated product, however we expect sales to commence shortly.”

What next for PolyNovo?

This could be the first of a number of similar agreements in Europe that underpin its growth in the region.

Mr Brennan explained that the company “expects to announce further European market entries in the near term.”

More reading

• Got $3,000? Buy these exciting ASX growth shares
• 2 exciting ASX healthcare shares to buy for the long term
• Are biotech shares like Polynovo (ASX:PNV) a better buy than Afterpay?
• Up 9.2% in 1 day, is the Clinuvel Pharmaceuticals (ASX:CUV) share price a buy?
• 2 exciting ASX growth shares to buy in September

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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It certainly has been an eventful year for the Zip Co Ltd (ASX: Z1P) share price.

The buy now pay later provider’s shares have been as low as $1.05 in March and as high as $10.64 in August.

Today they are trading in the middle of this range at $6.06.

Where next for the Zip share price?

Given its rollercoaster ride in 2020, investors will no doubt be trying to figure out where the Zip share price will be going next.

While I suspect that its shares could go notably higher from here if it continues its impressive growth in the coming quarters, I thought I would take a look to see what brokers are predicting.

The bulls.

There are a couple of brokers that are bullish on Zip and have positive ratings on its shares.

Ord Minnett has an accumulate rating and a $6.45 price target, whereas Morgans has an add rating and lofty $10.28 price target.

The latter price target implies potential upside of almost 70% over the next 12 months.

Its analysts are positive on its outlook thanks to its international expansion, the Zip Business launch, and its partnership with eBay Australia.

The bears.

The likes of Macquarie, Citi, and UBS all have the equivalents of sell ratings on the company’s shares at present.

Macquarie is the most bearish in the group with its underperform rating and $4.80 price target. This price target implies potential downside of almost 21% for the company’s shares.

Whereas UBS has a sell rating and $5.50 price target and Citi has a sell rating and $6.70 price target. The latter is now higher than where Zip’s shares are trading currently.

Should you invest?

While my preference remains Afterpay Ltd (ASX: APT) at current prices, I still think Zip would be a great long term option for investors.

As you can see from the varying opinions above, knowing where the Zip share price will go in the near term is highly unpredictable. However, over the long term, I’m confident it will be going notably higher from here.

This is thanks to its international expansion, new verticals, and the growing popularity of the payment method.

More reading

• Why the Xero (ASX:XRO) share price can hit $100 again in 2020
• Why Mesoblast (ASX:MSB) and this ASX 200 share have doubled in value in 2020
• 2 stunning ASX growth shares to buy and hold
• 5 things to watch on the ASX 200 on Wednesday
• Is the Afterpay (ASX: APT) share price a buy? 

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Xero Limited (ASX: XRO) share price rocketed 4.4% higher in yesterday’s trade to lead the S&P/ASX 200 Index (ASX: XJO) winners list.

Why did the Xero share price surge?

There were no new announcements from the Aussie software company but that didn’t stop heavy buying by investors.

The latest surge comes amid a broader sell-off in technology shares, particularly in the US-based Nasdaq.

It’s been a tough few weeks for tech investors who have seen the likes of Xero and Afterpay Ltd (ASX: APT) track US tech stocks lower.

But it seems like the Xero share price has met some support in the market and bounced back strongly.

Will the ASX tech share again rocket past $100 per share?

I think the Xero share price could be on the move again in this morning’s trade. US tech stocks performed strongly overnight and the ASX 200 looks set to rise.

That’s good news for investors but I think the medium-term outlook also has a lot to like.

Xero has continued to acquire and retain customers despite the coronavirus pandemic. The company has a clear, steady expansion plan with a mix of organic and inorganic (i.e. from acquisitions) growth.

That could see the company take big strides towards achieving the growth that is promised by its current 4,417 price-to-earnings (P/E) ratio.

If the company can continue to grow while keeping customer churn numbers low, I think the Xero share price is a good chance to hit $100 per share again in 2020.

Foolish takeaway

ASX tech shares have been under pressure in recent weeks but we could be seeing a turning point.

The Xero share price doesn’t look cheap by any means but it could still be a good buy for growth. As of Tuesday’s close, the company’s shares are still well below their all-time high of $103.48 per share reached earlier this month.

I think the Aussie tech share is worth watching in early trade as the market looks set to rebound.

More reading

• Where next for the Zip (ASX:Z1P) share price?
• Correction or crash for ASX 200 shares?
• Is the Coles (ASX:COL) share price a buy after renewable energy deal?
• Why Mesoblast (ASX:MSB) and this ASX 200 share have doubled in value in 2020
• 2 stunning ASX growth shares to buy and hold

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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