Xero Ltd (ASX: XRO) shares are starting the week in the red.

In morning trade, the cloud accounting platform provider's shares are down 1.5% to $169.58.

Is this a buying opportunity for investors? Let's see what analysts at Macquarie are saying about Xero shares.

Are Xero shares a buy?

According to a note out of Macquarie, its analysts are feeling bullish about the investment opportunity here.

The broker has named a few reasons to be positive right now. The first relates to its belief that a stronger US performance is on the cards. It said:

The US growth opportunity for Xero (XRO) has been undeniably challenging for many years. However, we think better traction in US growth is probable, driven by new management, strategy, data models, features, an improved product, better partner economics, and favourable shifts in both US regulatory tailwinds and the competitive landscape.

Another reason is positive channel checks, which support the view that Xero is a serious threat to Intuit (NASDAQ: INTU) in the US. It adds:

XRO's product is rapidly emerging as a viable competitor to Intuit, with XRO's basic plans ~44% cheaper in the US. Intuit has ~70% market share of the 33m SMBs in the US, is increasingly focused on mid-market, its marketing has upset the Partner channel, and its product is ~44% more expensive than XRO at cheaper plan prices. With no clear second player to INTU in the US, we think XRO is in a solid position for strong US growth over next 5 years.

Macquarie also highlights that its sees potential for Xero to deliver stronger than expected earnings with its full year results this month. The broker said:

US payments growth through the Stripe partnership is highly accretive to group EBIT margins, which we see as a potential source of EBIT surprise at the upcoming result, alongside delay of CAC allocation due to SMB confidence.

Price target

The note reveals that Macquarie has reaffirmed its outperform rating and $191.90 price target on Xero's shares. Based on its current share price, this implies potential upside of 13% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

Management is walking the walk, making data-driven decisions that invariably lead to better capital allocation outcomes. We have high conviction in the >12-month story. However, reinvestment for growth is likely in FY26 guidance. Downside from cost growth presents a buying opp. Reiterate Outperform.