The Xero Limited (ASX: XRO) share price has moved 5% higher in the past month. This comes despite no new price-sensitive news from the cloud accounting platform provider since its FY21 results in mid-May.
At Thursday's market close, Xero shares finished the day down 2.71% to $141.59.
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What's been driving Xero shares higher?
A possible catalyst for the recent rise in the Xero share price could be a note released by a leading broker last Wednesday.
According to Goldman Sachs, its analysts are viewing Xero with a favourable outlook.
The multinational investment house acknowledged Xero's recent launch of its app store across the Australia, New Zealand and United Kingdom markets. It said the company is focused on achieving international expansion through monetising the strong position of its app store.
Goldman Sachs believes the total addressable market for the Xero app store to be NZ$1.4 billion (A$1.34 billion).
Furthermore, the broker expects Xero to double its revenue across FY21 to FY24 with a 26% compound annual growth rate. In its FY21 financial results ending 31 March, Xero highlighted operating revenue coming in at $848.8 million, up 18% year on year.
In addition, the company's subscriber base grew to 2.74 million subscribers, up 456,000 year on year.
Net profit stood at $19.8 million, an increase of $16.4 million year on year.
In light of this, Goldman Sachs put a "buy" rating on Xero shares, raising its 12-month price target by 9.3% to $165.00. Based on the current Xero share price, this implies an upside of approximately 16.5%.
Xero is scheduled to report its FY22 half-year results on 11 November 2021.
Foolish takeaway
Since last August, Xero shares climbed higher from the $90 mark to almost touch $160 in December 2020. Investors would have enjoyed returns of around 75% in just a few months. However, following its meteoric rise, the Xero share price has largely moved in circles. Year to date, Xero shares are down 3%.
As the twentieth largest company on the ASX, Xero has a market capitalisation of roughly $21 billion.
