The Xero share price lost 14% last month. Here's the tea

It's been a tough few weeks for the accounting software company.

| More on:
A man at his desk in an office holds his hands up in the air in frustration while looking at the falling share price on his computer screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • It was a rather grim month for ASX 200 shares over June
  • But many ASX 200 tech shares did even worse than the broader index, including Xero
  • However, a broker recently came out with an "add" rating on the Xero share price

As most ASX investors would be aware, the month just gone was not an especially pleasing one for ASX investors or the S&P/ASX 200 Index (ASX: XJO). June saw the ASX 200 lose almost 9% of its value. But what of the Xero Limited (ASX: XRO) share price?

Xero is one of the most popular ASX growth shares on the market. The online accounting software company has delighted investors in the past with impressive share price rises. Over 2020, Xero shares appreciated by a pleasing 80% or so.

But the company has been struggling since 2020. Over this year so far, Xero has lost close to half of its value. So with this in mind, how did Xero go over June?

From hero to Xero for share price

Well, as one might guess, it wasn't a particularly uplifting month for the Xero share price. The company began June at a price of $89.29 but closed at just $76.96 on Thursday. That means Xero recorded a loss of 13.8% over the month, a marked underperformance of the broader ASX 200.

This was despite the absence of any news or announcements out of Xero over June. So it's likely the nasty falls Xero shares experienced were purely driven by the investor apathy towards tech shares that we saw during the month.

Many other ASX tech shares experienced similar falls over the period. For example, WiseTech Global Ltd (ASX: WTC) lost more than 10%, while Block Inc (ASX: SQ2) sunk by more than 28%. Zip Co Ltd (ASX: ZIP) had a shocker, falling by more than 52%.

But it might not be all bad news for Xero investors. As my Fool colleague James covered last week, ASX broker Morgans has just come out with an "add" rating on the Xero share price.

Morgans sees Xero as "a high-quality company, with strong growth potential in an industry with high barriers to entry". It has given the company a 12-month share price target of $90.25, which implies a potential upside of more than 16% from recent pricing.

So perhaps the Xero share price has far more exciting things in front of it than it left behind in June. But we shall have to wait and see.

Motley Fool contributor Sebastian Bowen 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 Block, Inc., WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today.
Technology Shares

Why this high-flying ASX 200 tech stock just got downgraded

Let's see which stock has been hit with a downgrade today.

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Technology Shares

Up 10% in a day, why this ASX tech share is exciting investors

It’s been a good start to the week for this company’s shareholders.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Technology Shares

Which ASX 200 tech stock is jumping 8% to record high?

This high-flying stock had another strong quarter.

Read more »

A businessman leaps in the air outside a city building in the CBD.
Technology Shares

Guess which ASX 300 stock is jumping 13% on guidance upgrade

A profit upgrade has gone down well with investors today.

Read more »

drone technology, drone defence, woman operating drone
Technology Shares

DroneShield shares rocket 11% to record high on big news

Let's see what this high-flying stock has announced this morning.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Technology Shares

Here are 2 exciting ASX shares rated as buys

These shares are highly rated by brokers. Let's find out why.

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Technology Shares

Is this the decade of the data centre? One ASX 200 stock that could benefit

Let's see why one leading broker thinks this stock could be destined for big things.

Read more »

A human-like robot checks out market performance on a laptop, indicating the rise of AI shares.
Technology Shares

3 top performing ASX AI shares for your watchlist

Have you positioned your portfolio to capitalise on the next tech revolution?

Read more »