After a shaky start, Xero Ltd (ASX: XRO) shares were on form on Thursday and charged higher.

Investors initially responded negatively to the cloud accounting platform provider's full year results before seeing something that changed the mood very quickly.

What are brokers saying about Xero shares?

Although Xero's earnings for FY 2025 and expense guidance for the year ahead fell short of expectations, brokers are overlooking this thanks to a surprisingly strong performance in the United States.

Goldman Sachs responded to the results, stating:

The highlight was the stronger than expected International segment, with revenue/profit +2%/+6% vs. GSe, and North America delivering its strongest ever organic subscriber growth (+35k) despite Canada remaining subdued. We see this performance as an important data-point, that gives confidence to support Xero's decision to increase its focus (and investment) in the US market, noting that although the NZ$45mn non-recurring expense will drop away – we expect this will be replaced by c.NZ$100mn+ p.a. of brand-building spend from FY27E, when XRO's US product is GTM ready.

In response, the broker has retained its buy rating and lifted its price target to $205.00.

Based on the current Xero share price of $182.05, this implies potential upside of 12.6% for investors.

What else?

Morgans was impressed with its performance in the United States. So much so, the broker has upgraded Xero's shares from a hold rating to an add rating with a $215.00 price target. This suggests that upside of 18% is possible from current levels. It said:

XRO's result and outlook commentary were largely inline with expectations. For us, the highlights of the result was improved sales traction and tight cost management, which are supportive of accelerated investment in growth. We upgrade our Target Price to A$215 and our rating to an Add (from Hold).

Finally, analysts at Macquarie were pleased with the company's international performance. It said:

UK saw 12% u'lying subs growth, driven by new product plans including the recently launched Xero Simple for Making Tax Digital (MTD). In the US, product velocity continues to support subs growth (+11% u'lying YoY), while Canada remains subdued. South Africa was called out as main contributor to ROW (+11% u'lying YoY).

As a result, it has retained its outperform rating with an improved price target of $204.00. The broker concludes:

Mgmt is walking the walk, making data-driven decisions that invariably lead to better capital allocation outcomes. We have high conviction in >12- month story. However, with upcoming brand reinvestment, any downside from cost growth presents buying opp. Reiterate Outperform.

All in all, the broker community appears to believe that it isn't too late to invest in this high quality ASX stock.