After the recent correction, some of the top growth stocks are available at fair valuations. Two of the best growth stocks to buy now are
REA Group Limited (ASX: REA)
REA Group Limited (ASX: REA), on 6 February 2025 reported an outstanding H1 result of the fiscal year 2025. Delivering strong revenue and profit growth, REA achieved a 20% revenue increase to $873 million, driven by a solid performance in its core Australian market and significant growth in India.
The rise in operating expenses by 18%, reflected continued investment in strategic initiatives, while EBITDA (excluding associates) increased by 22% to $535 million. Net profit attributable to owners surged by 26% to $314 million, with earnings per share also growing to $2.38.
During this period, it also gained from the sale of REA Group’s stake in PropertyGuru, contributing a strong 246% increase in reported net profit, amounting to $441 million. REA Group declared an interim dividend of $1.10 per share, a 26% year-on-year increase, reinforcing its commitment to deliver returns to shareholders.
The Australian market witnessed a robust property listing environment, enabling revenue to grow by 19% to $809 million. Residential revenue surged by 21%, led by yield improvements and higher listings, while commercial and developer revenue rose by 10%.
The company’s flagship platform, realestate.com.au, strengthened its market leadership, with a significant increase in user engagement and lead generation. The financial services segment saw a 13% growth, deriving benefit from higher loan submissions and improved productivity across its broker network.
REA Group is among the high growth stocks having been able to maintain a strong financial position, repaying all external debt after the divestment of PropertyGuru It had a substantial cash balance of $338 million with an undrawn debt facility of $400 million. REA Group is well-positioned for sustained growth in the coming years.
Xero Limited (ASX: XRO)
Xero Limited (ASX: XRO) delivered strong financial performance for the first half of the fiscal year 2025 (H1 FY25), establishing its ability to deliver consistent growth and execute its strategic objectives effectively. The company reported a significant increase in operating revenue, reaching NZD 995.9 million, achieving a 25% growth in comparison to the previous period.
Its earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a steep rise of 51% to NZD 311.7 million, with free cash flow almost doubling to NZD 208.7 million. This leading to an improved free cash flow margin of 21.0% and a Rule of 40 outcome of 43.9%, reinforcing Xero’s strong financial position.
Revenue growth has remained strong across all regions. Whereas Australia and New Zealand witnessed a 24% increase in revenue, with subscriber numbers growing to 2.5 million. International markets, including the UK and North America, saw a 25% rise in revenue, in spite of the impact from the removal of inactive subscriptions.
Xero maintains its aim to double its business size while continuing to deliver a Rule of 40 or greater performance. The company expects operating expenses to remain around 73% of revenue in FY25 and continues to balance subscriber growth with ARPU expansion. Xero remains committed to disciplined, customer-focused growth as it advances toward its long-term strategic goals.
(Source: Company's Report)
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