The Xero Limited (ASX: XRO) share price has been on fire in 2023.
Since the start of the year, the cloud accounting platform providerâs shares have risen a remarkable 76%.
In light of this strong gain, you would be forgiven for thinking that this ASX 200 share could now have peaked.
However, one leading broker doesnât believe that is the case and is tipping more strong gains ahead for investors.
What is being said about this ASX 200 share?
According to a note out of Goldman Sachs, its analysts have reiterated their conviction buy rating and lifted their price target by 13% to $147. Based on the current Xero share price, this implies a potential upside of 19% for investors over the next 12 months.
Goldman has increased its valuation after lifting its earnings estimates through to FY 2026 on the belief that Xero’s revenue growth will be stronger than previously expected. This is being underpinned by the resilience of small businesses in the current environment. It explains:
[F]ollowing our historical analysis of Xero SMB index data with historical churn rates, we are incrementally positive that SMBs remain resilient in current macro (particularly ANZ), with the data showing limited changes in 1H24TD, consistent with SGE.Lâs 3Q23 commentary on limited impacts.
What else?
Outside this, Goldman feels Xero is an ASX 200 share to buy due to its positive long-term growth outlook. It concludes:
We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$76bn TAM. Given the companyâs pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ â we are Buy rated (on CL).
