The Xero Limited (ASX: XRO) share price is out of form again on Wednesday.
In afternoon trade, the cloud accounting platform provider's shares are down over 2.5% to $79.72.
This means the Xero share price is now down over 45% since the start of the year.
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Where next for the Xero share price?
Because of the weakness in the Xero share price this year, I'm sure there are many investors out there that are wondering if now is the time to pounce.
In light of this, I thought I would take a look to see what the bulls and the bears are saying at the moment.
Let's start with the bears at UBS, which have a sell rating and $70.00 price target on the company's shares.
UBS believes that Xero's valuation still looks stretched despite the selloff this year. Its analysts were disappointed by the lack of operating leverage with Xero's recent FY 2022 results. And while the broker sees Xero benefiting from structural tailwinds, it isn't enough for a more positive view.
Over at Macquarie, its analysts are a little more positive with their neutral rating and $80.00 price target.
Macquarie has a few nagging concerns about wage inflation due to the tight labour market and its belief that Xero has the highest sensitivity to higher employee costs in the tech sector.
The bulls
The good news is that the bulls vastly outweigh the bears, with the likes of Citi, Goldman Sachs, Jefferies, Morgan Stanley, Ord Minnett, and Wilsons all having the equivalent of buy ratings on its shares.
The most bullish is arguably Morgan Stanley, which has an overweight and $137.00 price target. Based on the current Xero share price, this implies potential upside of 72% for investors over the next 12 months.
It is followed by Goldman Sachs with its buy rating and $118.00 price target. Goldman notes that Xero's shares are trading at multi-year lows in respect to its enterprise value/gross profit ratio. This is despite the market forecasting strong revenue growth through to at least FY 2025.
