The tech sector has come under significant pressure this year. While this is very disappointing, it could have created a buying opportunity for patient long-term focused investors.
Here are two beaten ASX tech shares that could be in the buy zone:
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Life360 Inc (ASX: 360)
The first beaten down ASX growth share to look at is Life360. It is a location-based services provider based in San Francisco, United States with 33 million+ monthly active users. Its shares were sold off on Thursday following the release of its full year results, which means the Life360 share price is now down 50% in 2022.
In response to its results, this morning Bell Potter put a buy rating and $10.00 price target on its shares. This is more than double where its shares trade today. Its analysts remain very positive on the company's future and continue to forecasts very strong growth in the coming years.
Bell Potter commented: "We have updated each valuation used in the determination of our price target for the forecast changes as well as market movements and time creep. We have also removed the premium in EV/Revenue valuation and increased the WACC in the DCF from 8.4% to 8.7% due to the uncertainty around any impact on Tile and also the potential US listing and any associated raising. The net result is a 26% decrease in our PT to $10.00 which is still a large premium to the share price so we keep the BUY."
Xero Limited (ASX: XRO)
Another beaten down ASX growth share to look at is Xero. On Thursday, this cloud accounting platform provider's shares dropped to a 52-week low of $91.81. When the Xero share price hit this level, it meant it was down over 40% from its highs.
One broker that is likely to see this as a buying opportunity is Goldman Sachs. Its analysts currently have a buy rating and $158.00 price target on its shares. This implies potential upside of ~70% for investors over the next 12 months.
Based on its forecasts, Goldman believes Xero will almost double its revenue and operating earnings from FY 2021 to FY 2024.
