Xero Ltd (ASX: XRO) shares are pushing higher on Thursday.
In afternoon trade, the cloud accounting platform provider's shares are up almost 1% to $189.11.
This leaves its shares trading within touching distance of their record high of $193.78.
Can Xero's shares break records and then go beyond $200? Let's see what analysts are saying about this market darling.
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Can Xero shares surpass $200 in 2025?
The good news is that a large number of brokers see potential for Xero shares to break through the $200 mark.
For example, the team at Morgans recently upgraded the company's shares to an add rating with a $215.00 price target. This implies potential upside of almost 14% for investors over the next 12 months. 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).
Elsewhere, the team at Goldman Sachs has a buy rating and $205.00 price target on Xero's shares.
Its analysts were impressed with the company's performance in FY 2025 and particularly in the US market. It said:
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.
Finally, Macquarie believes its shares can surpass the $200.00 mark. Its analysts have an outperform rating and $204.00 price target on its shares.
Like Morgans and Goldman Sachs, the broker was impressed with the company's performance in FY 2025. It said:
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.
It also highlights that Xero has a large opportunity in payments. It explains:
Payments is XRO's largest TAM at ~NZ $59b, mostly in the US. Growth was driven both by TPV (+38% YoY) and take-rate (+27 YoY). With Trump's digitisation of payments, accounts receivable partnership, positive commentary on UK payments and high EBIT margins (we estimate ~90%) on Stripe partnership, there is early evidence of new growth engine.
All in all, although Xero's shares have rallied almost 50% since this time last year, most brokers agree that it isn't too late to add them to your portfolio.
