Xero Limited (ASX: XRO) shares were up as much as 3.5% this morning, closing in on the 52-week high and a price of $70. Will shares continue to push past $70?

Founded in New Zealand in 2006, Xero has become the dominating player in the business and accounting software market in Australia, New Zealand and the UK. Employing more than 2,300 people, Xero helps more than 1.8 million subscribers manage their accounting and tax obligations.

Can Xero Shares Hit $70?

Xero shares are up more than 58% year-to-date and rose as much as 3.5% this morning despite no announcements from the company. Throughout the day, shares have come back down and are now up around 0.8%.

This has continued the company’s positive run from last week, which saw the share price up ~3.5% on Thursday and ~2.3% on Friday.

While it may not be the cause, these gains have followed the 2019 Xerocon event in Brisbane, which is the largest cloud accounting conference in Australia, New Zealand and Asia. It took place last week on Wednesday and Thursday.

These consecutive green days pushed the share price as high as $68.77 today, just short of the 52-week high of $68.88 and only 1.75% below a $70 share price.

While the company is still making a loss, the FY19 annual report showed strong growth, with revenue up 36% and gross profit up 39%. The FY19 report also showed that the company had its first positive free cash flow result and had achieved a net profit after tax in the second half of the year.

This growth, coupled with the likelihood of profitability in the near-term, suggest a $70 share price is not hard to imagine.

My Take

Xero is an excellent business that I would love to have in my portfolio because of its growth prospects and very high margins. However, after these share price rises, I’ll be waiting for a more attractive price before investing.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.