The Xero Limited (ASX: XRO) share price hit a record high of $66.75 this morning but has room to run higher if the gun analysts at Macquarie Group Ltd (ASX: MQG) are on the money.
According to financial news wires ,Macquarie's research analysts have slapped a bullish $76.50 12-month share price target on Xero and 'buy' equivalent rating.
In Australia Macquarie is well regarded for doing some of the most in-depth fundamental research going thanks to its deep resources, wide reach, and determination to be the best.
I don't have a copy of the research report, but it's fair to say Macquarie's analysts are probably impressed with the online accounting platform's growth rates and market opportunity ahead.
Yesterday, I even tipped Xero yesterday as my top stock to buy in August, as it looks a scalable business that boasts attractive SaaS economics, with a big market opportunity to still grow in the UK, US, Canada, Singapore, and South Africa for example.
What about a $700 share price?
Almost exactly this time last year I also covered how high-profile local fund manager John Hempton had told The Australian Financial Review that he though Xero could be a $100 billion company one day. Assuming its scrip on issue remains the same that would equal a share price around $700!
This Panglossian view of Xero might sound preposterous, but if we consider that its larger cloud accounting rival Intuit Inc. (NASDAQ: INTU) (running the Quickbooks platform) now has a market value of US$72.6 billion (A$106b) it isn't so crazy.
In conclusion, I'd have to agree with Macquarie in rating Xero shares a buy.
