The Xero Limited (ASX: XRO) share price is out of form again on Friday.
In morning trade, the cloud accounting platform provider's shares are down almost 1% to $112.34.
This means the tech share has pulled back over 7% since hitting a 52-week high of $121.29 at the start of the week.
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Is this pullback a buying opportunity?
Despite the recent pullback, Xero shares are still up a whopping 60% since the start of the year.
The good news, though, is that some brokers still see scope for them to keep rising. This could make the recent weakness a buying opportunity for investors.
Goldman Sachs, for example, currently has Xero on its conviction list with a buy rating and a $130 price target. This implies a potential upside of almost 16% for investors over the next 12 months. It commented:
We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$76bn TAM.
Is anyone else bullish on Xero shares?
Analysts at Citi and Morgan Stanley also have the equivalent of buy ratings on the company's shares. The two brokers have price targets of $120 and $125, respectively.
Commenting on recent price increases in the ANZ region, Citi said:
While the price increase represents upside to our ARPU forecasts, more importantly it should offset any potential weakness in top-line growth due to slowing macro conditions/potential increase in churn and also speaks about Xero's strong competitive position in ANZ.
Its analysts ultimately expect this to underpin significant profit growth in the coming years. The broker's estimates imply earnings per share growth of 494% in FY 2023, 49% in FY 2024, and 38% in FY 2025.
Overall, it doesn't appear to be too late to buy Xero shares based on what these brokers are saying.
