2 beaten down ASX tech shares analysts say have major upside potential

These beaten down tech shares could be buys according to analysts…

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Are you interested in adding some ASX tech shares to your portfolio after the market selloff?

Two ASX tech shares that could be worth considering are listed below. Here’s why analysts are positive on them:

Life360 Inc (ASX: 360)

The first ASX tech share to look at is Life360. This growing technology company is responsible for the Life360 mobile app, which is a market leading app for families.

It has been growing at a rapid rate in recent years and has continued this positive trend in FY 2022. During the first quarter, the company revealed that its global monthly active users reached 38.3 million at the end of March. This was up 36% year on year and underpinned a 73% increase in annualised monthly revenue to US$166.1 million.

And while it continues to operate at a loss, analysts at Bell Potter believe investors should look beyond this. Particularly given its hefty cash balance and plans to be cash flow positive in 2023.

It is for this reason that the broker believes the Life360 share price has been oversold.

The broker said: “[Life360] remains a key pick and we believe has been oversold as, despite currently being loss making, has ample cash to fund it through to cash flow breakeven or positive in 2023 or 2024 while maintaining strong top line revenue growth and realising the synergy benefits from the recent Tile acquisition.”

Bell Potter has a buy rating and $7.50 price target on its shares. This implies potential upside of over 100%.

Xero Limited (ASX: XRO)

Another ASX tech share that has been sold off is Xero. The leading cloud-based business and accounting software provider’s shares are down 40% since the start of the year due to weakness in the tech sector.

While this is disappointing, analysts at Goldman Sachs believe this could be a buying opportunity for long term focused investors. Particularly given its view that Xero is a “compelling global growth story” with potential for multi-decade strong growth.

Goldman Sachs recently reiterated its buy rating on its shares with a $118.00 price target. This suggest potential upside of 34% for investors over the next 12 months.

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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