It has been a tumultuous few weeks for Xero Ltd (ASX: XRO) shareholders.
The Xero share price finished Tuesday at $58.04, down around 49% in 2026 and 63% over the past 12 months.
It has also fallen more than 30% in September alone, despite the company releasing no major bad news during the sell-off.
But could Xero shares eventually make their way back to $100?
From yesterday's close, that would require a gain of around 72%.
That sounds like a lot, but I don't think $100 is unrealistic over the next couple of years.
Here's why.
Image source: Getty Images
The market has changed its mind
One of the most interesting things about Xero's fall is how quickly investors have changed what they're willing to pay.
Back in late August, Xero shares were trading close to $90.
A month later, they're below $60.
Yet Xero hasn't issued an earnings downgrade or warned of deteriorating trading conditions during that period.
Instead, rising bond yields, interest rate concerns and worries about AI have all weighed heavily on the software sector.
That has pushed Xero back to a share price last seen in mid-2019.
The difference is that Xero is now a much bigger business.
Operating revenue increased 31% to NZ$2.75 billion in FY26, while adjusted EBITDA rose 18% to NZ$757.4 million.
Free cash flow also reached NZ$554 million.
So, while the share price has gone backwards, the business definitely hasn't.
What could get Xero back to $100?
For me, Xero doesn't need everything to go perfectly.
It simply needs to show investors that its current growth can continue and that the Melio acquisition is starting to pay off.
Management expects FY27 operating revenue of between NZ$3.62 billion and NZ$3.73 billion.
Adjusted EBITDA is forecast between NZ$860 million and NZ$920 million.
The US could be particularly important.
Xero is spending heavily to build its brand there, while Melio gives the company a much bigger opportunity in payments.
Then there's AI.
Xero now has more than 5 million customers and is rolling out JAX, its AI platform designed to automate bookkeeping and financial workflows.
If those investments drive faster US growth and higher revenue per customer, investors could start looking at Xero very differently again.
Would I buy Xero shares?
Yes, I would.
I'm not expecting Xero shares to race back to $100 anytime soon.
But at $58.04, I think Xero shares are looking increasingly attractive after the recent sell-off.
The company is still growing quickly, generating plenty of cash, and has a huge opportunity ahead of it in the US.
And keep in mind, a return to $100 would still leave Xero well below its previous highs.
If management delivers on its FY27 guidance and Melio starts adding to growth, I think Xero shares can eventually climb back above $100.
