Why did the Xero (ASX:XRO) share price sink 5% today?

What's happened to Xero shares?

Key points
  • Xero shares closed 5.16% lower to $99.03
  • The company's shares have been dragged down by the broader tech sector in 2022
  • The Xero share price is down 30% year to date

The Xero Limited (ASX: XRO) share price was in reverse today despite the company not releasing any new announcements.

At market close, the cloud accounting platform provider's shares finished down 5.16% to $99.03 apiece.

A man sits in front of his laptop computer with his head on his hand and a sad, dejected look on his face after seeing how far Whitehaven shares have fallen today

Image source: Getty Images

What's happened to Xero shares?

An impressive growth story stretching back from 2012, Xero shares have tumbled since the beginning of 2022.

A loss of 30% in the space of a few months is enough to wane investor sentiment. In contrast, the S&P/ASX 200 Index (ASX: XJO) has largely remained unchanged over the same timeframe.

While it remains to be seen if the Xero share price has finally bottomed out, the company has been relatively quiet on the news front.

Its last financial update came back in November 2021 when Xero delivered its half-year results to the market.

Despite the company posting a net loss for the period, most key metrics lifted by double-digits.

Nonetheless, the S&P/ASX All Technology Index (ASX: XTX) has been pounded this year, which could give cause as to why Xero shares are down.

The tech sector is currently down 18% year to date.

Is the Xero share price a buy?

A number of brokers have recently weighed in the company's shares price with varying price points.

The team at Citi lowered its 12-month price target for Xero shares by 17% to $132.60 earlier this month.

However, analysts at Macquarie adopted a more bearish tone, cutting Xero's rating by 23% to $100.00 a share. It appears investors believe that the current Xero share is in line with Macquarie's estimates.

As the 28th largest company on the ASX, Xero has a market capitalisation of roughly $14.87 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Macquarie Group Limited. 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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