2022 has started off poorly for the Xero Limited (ASX: XRO) share price.
The company’s stock has tumbled 13.38% year to date despite no price-sensitive news having been released to the market. That continues on from a disappointing 2021 wherein its stock slumped 3.6%.
However, the future might be brighter for the business and accounting-focused software-as-a-service provider.
At the time of writing, the Xero share price is $126.66, 3.19% lower than its previous close. For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.06% right now.
Let’s take a look at what might be weighing on the stock lately and what the future might bring it.
What’s weighing on Xero’s stock in 2022?
The last time the market heard price-sensitive news from Xero was way back in mid-November. Thus, it’s not likely that news from the company is driving its share price this month.
Instead, it could be the general tumble that faced many ASX tech stocks last week that has driven Xero’s value lower.
On Thursday, Australia woke up to a bloodbath across much of the United States’ market. Tech shares took the brunt of the plunge, with the Nasdaq Index sliding 3.3%.
The disastrous session was likely due to the US Federal Reserve, which seemingly suggested an upcoming rate hike.
The Xero share price plummeted alongside the S&P/ASX Technology Index (ASX: XTX) on Thursday. They fell 6.5% and 5.6% respectively.
Unfortunately, its unlikely fears of rate rises have abated. That might be the reason the All Tech Index is down once more today, shedding 0.9% at the time of writing.
What might be next for the Xero share price?
The Motley Fool’s Tony Yoo reported on expectations of the Zero share price last month.
He spoke to Medallion Financial managing director Michael Wayne, who remains certain of the company’s stock. Yoo quoted Wayne as saying:
[Xero] has been a good performer over a long period of time. We are drawn to the capital-light and scalable software-as-a-service attributes of the business.
We continue to be encouraged by the sticky nature of the product.
But the fundie won’t be buying at its current share price. He believes Xero would be a buy at around $110 to $115.
Though, back in mid-December, my Foolish colleague Tristan Harrison reported that Credit Suisse had tagged Xero’s stock with a $160 price target, implying a 26% upside on its current share price.
Either way, the two experts agree Xero will likely continue its historically strong – though, perhaps momentarily disappointing – performance in the future.