The Xero Limited (ASX: XRO) share price is on course to end the week in the red.
At the time of writing, the cloud accounting platform provider's shares are down almost 1.5% to $85.93.
This means the Xero share price is now down over 40% since the start of the year.
What are brokers saying about the Xero share price?
In light of the poor performance from the Xero share price in 2022, investors may be wondering if it has created a buying opportunity.
The good news is that three leading brokers see value in its shares at the current level.
Here's what they are saying about Xero:
Citi currently has a buy rating and $108.00 price target on the company's shares. This implies potential upside of almost 26% for investors. The broker was pleased with its recent price increases. It commented:
We see Xero's decision to increase prices in ANZ and UK as an indication of the company's confidence in its position in its core markets. While the changes would not have a full impact in FY23e, we estimate the changes represent a 8% uplift to group ARPU and represents upside to our ARPU forecasts. An increase in churn is a factor to consider especially given the slowing economic outlook
Over at Goldman Sachs, its analysts have a buy rating and $113.00 price target on its shares. This represents potential upside of 31% for the Xero share price. It said:
While noting that the near term remains robust, we do acknowledge the risk of higher churn from SME business challenges and recent price increases. Nevertheless, we see Xero as well-placed to navigate this uncertainty given the stickiness & importance of its software, and lower levels of churn vs. AU overall.
Finally, analysts at Morgans are bullish and recently initiated coverage on its shares with an add rating and a more modest $90.25 price target.
XRO has a significant runway for customer growth with <10% penetration of a 45m+ SMB Total Addressable Market (TAM). We see additional earnings upside from platform / ancillary value-added services and margin expansion.
