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 young man punches the air in delight as he reacts to great news on his mobile phone.
Technology Shares

Buy alert: Why this broker just upgraded DroneShield shares

Bell Potter is feeling bullish about this high-flying stock.

Read more »

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

Macquarie forecasts 25% upside for this ASX All Ords software company

The business signed three new contracts in the June quarter.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Technology Shares

DroneShield shares race higher on 480% revenue surge

It was another explosive quarter for this high-flying stock.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Technology Shares

Why is the Appen share price crashing 15%?

This AI stock is having a tough time on hump day. But why?

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Technology Shares

WiseTech share price higher on big news

This tech stock has found its new leader.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »