Key points
- The Xero share price has slumped 23% since the end of 2021
- It may have been weighed down by rising inflation, which likely impacted most of the tech sector
- Still, brokers are bullish on the technology company. One has slapped it with a $158 price target
The new year has been tough on the Xero Limited (ASX: XRO) share price.
It's tumbled 23.1% since the final close of 2021. That's despite no news having been released by the company.
At the time of writing, the Xero share price is $108.69. That's despite it closing at $141.44 on 31 December.
The S&P/ASX 200 Index (ASX: XJO) has also had a shocking start to 2022. It has fallen 5.3% this year.
That leaves Xero's stock having underperformed the broader market by 17.8% in 2022 so far.
So, what's been weighing on the accounting software provider lately? And when can the market expect to hear from it next? Let's take a look.
What's going on with the Xero share price?
The Xero share price has had a rough trot in 2022, likely made worse by the performance of the broader tech sector.
While the ASX 200 has slipped 5%, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has plunged 20.86%. At the same time, the S&P/ASX All Technology Index (ASX: XTX) has slumped 16.09%.
And what might be behind the tech sector's struggles? Well, it's likely the much-discussed talking point, inflation.
As The Motley Fool Australia's Zach Bristow recently reported, tech shares are particularly sensitive to inflation concerns due to how they're valued.
Earlier this week the Reserve Bank of Australia noted inflation is rising faster than predicted. Though, the body hasn't made any moves to up interest rates yet.
While this could sound dire for the Xero share price, brokers are still bullish on the company.
Morgan Stanley rates the company as a buy with a $137 price target. Goldman Sachs also has high hopes for the stock – it's targeting $158.
Unfortunately, there's still a while before the market expects to hear news that could boost the ASX tech favourite back towards the green.
As Xero is a New Zealand-based company, its financial year runs from 1 April to 31 March. That means it won't be participating in the February reporting season. Its full year results are set to be dropped on 12 May.
