Xero Ltd (ASX: XRO) shares fell further into the red in September, down around 31% over the course of the month.
At the time of writing, the ASX technology stock is down around 1% to $57.39. That means the shares are down 49% year-to-date and 64% lower than 12 months ago.
It's been well-documented that the cloud-based accounting software business has been smashed by a tech-sector wide selloff this year after investors became spooked that AI could replace the core services of companies like Xero.
There has also been an investor rotation away from growth stocks and into more defensive assets amid ongoing global volatility and inflation concerns.
No price-sensitive news explains why Xero shares have shed so much value over the past month. Investors may have taken profits after the shares rebounded strongly through July and most of August.
The resurgence of macroeconomic pressures has also spooked investors across the board. This hasn't helped Xero's share price downturn.
Concerns about the latest inflation figures and the Reserve Bank's interest rate hike in September has only contributed to headwinds.
The Reserve Bank raised the cash rate to a 15-year high of 4.6% at its meeting earlier this week. On Wednesday, the Australian Bureau of Statistics (ABS) announced that Australia's annual headline inflation rate jumped to 4% in the 12 months to August 2026, up from 3.5% the month prior.
As of late September, Australian 10-year bond yields were sitting at around 5.36%, which hasn't helped high-growth tech stocks either.
The question now is, are Xero shares still a buy? Or will any investment made today turn into a loss by October 2027?
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What's ahead for Xero?
The company has sticky subscription revenue, and I see huge potential for growth both into new markets and with new offerings.
It looks like the experts are also bullish on Xero shares.
Market Index data shows that most brokers rate the shares a buy. The $112 average target price implies that the shares could jump another 95%, at the time of writing.
Sentiment is also very positive on TradingView. Out of seven analysts, six have a buy/strong buy rating and one rates the shares as a hold. However, they all agree there will be upside ahead.
The average $113.31 target price implies a potential 97% upside, while the maximum $144.36 implies Xero's shares could rise by another 151% at the time of writing.
If I buy $5,000 of Xero shares today, what could they be worth in 12 months time?
Assuming Xero shares reach the average forecasted target prices of $112 or $113.31, a $5,000 investment today could be worth around $9,750 or $9,850 by October 2027.
However, if the more bullish expert forecasts come to fruition, a $5,000 investment today could grow to $12,550 by this time next year.
