2 ASX shares that now have 80% upside: analysts

This duo of technology stocks could be oversold and prove to be a bargain when the market rotates back into the sector.

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Technology shares have taken a beating the past couple of months.

In Australia, the S&P/ASX All Technology Index (ASX: XTX) has lost more than 14% since mid-November. 

Across the Pacific, it’s even worse.

“Right now about 40% of US tech stocks on the NASDAQ are down 50% since their peak,” said commentator Peter Switzer on his Switzer TV Investing show.

“That makes me think that many good companies are oversold.”

Switzer’s team recently compiled the share price outlook of ASX tech shares from multiple analysts and came up with a few that could be absolute bargains right now.

Here are 2 that have more than 80% upside:

Wearing the big boy pants from this week

Buy now, pay later provider Zip Co Ltd (ASX: Z1P) has seen its shares tumble an eye-watering 74% off its 52-week high.

The stock closed Tuesday at $3.66, with the $14.53 high in February a distant memory.

But analysts are convinced this one’s wildly oversold. On average, the experts think Zip shares have an 82.6% upside.

One broker, Ord Minnett, reckons it can rocket up 157% from the current level.

This week Zip became the largest pure BNPL company on the ASX, as Afterpay Ltd (ASX: APT) departed the bourse.

“I think sometime this year these stocks will benefit from a rotation back into the tech and payment sector,” said Switzer.

“But you’ll have to have patience.”

Elmo sad now, but happy later?

The other stock to look out for is ELMO Software Ltd (ASX: ELO).

The share price for the human resources software maker has fallen more than 40% off its 53-week high, prompting analysts to think this might be a bargain at current levels.

On average, the professionals are betting on an 80.6% upside for the stock.

Morgan Stanley made the biggest call, looking for an 83% spike in Elmo shares this year.

“Good things come to those who wait,” said Switzer.

Elmo shares closed Tuesday at $4.26.

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Motley Fool contributor Tony Yoo owns Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Elmo Software, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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