Xero Ltd (ASX: XRO) shares are trading in the red again on Thursday morning.
At the time of writing, the shares are down 0.6% to $82.26 a piece.
Despite some minor softening today, the shares are still up 17% from a three-year low recorded 10 days ago.
Though, there is some way to go to recoup losses shed over the past 12 months. Xero shares are now down a staggering 48% over the past 12 months and have lost 58% of their value since peaking at an all-time high in June last year.
The question is: since rebounding from a multi-year low, are Xero shares now a buy? Or is this a temporary peak until the next crash?
Image source: Getty Images
Why have Xero shares crashed so far over the past year?
Xero has faced several major headwinds over the past year, sending its share prices crashing. Even robust financial results didn't stop investors from selling up their stock.
The share price decline was mostly the result of a sector-side sell off of technology stocks following rising concerns that AI could disrupt traditional software models. Many investors were worried that smarter, cheaper tools could reduce the need for subscription platforms like Xero. And sentiment quickly turned south.
At the same time, a sharp increase in the value of some ASX tech shares in 2025, including Xero, also sparked concerns that tech companies were overvalued and overdue a price correction.
What has driven Xero shares higher over the past 10 days?
There hasn't been any price-sensitive news out of the tech company to explain the recent rebound. This implies it's mostly a result of value investors buying back into the stock at a more attractive price after the steep sell-off.
At the same time, it looks like headwinds from AI concerns are finally beginning to ease.
Is the tech stock a buy, hold or sell now?
Analysts appear to be incredibly bullish on Xero shares, with widespread anticipation that we'll see some significant upside over the next 12 months.
TradingView data shows that, out of 14 analysts, 13 have a buy or strong buy rating. They tip a potential average upside of up to 70% to $139.15 a piece over the next 12 months.
However some analysts think the increase could be far steeper. The maximum $229.49 target price implies that Xero shares have the potential to soar 180% higher.
Hopefully, the latest rebound signals the beginning of a turnaround in investor sentiment and a resurgence of Xero's share price.
