Some top stocks from ASX listed companies, although having run up substantially, are showing further upside potential. Two of such growing companies to invest in are
Technology One Limited (ASX: TNE)
Technology One Limited (ASX: TNE) has delivered an outstanding set of results for the financial year ended 30 September 2024, surpassing profit growth guidance and reinforcing the strength of its SaaS-driven business model. Profit before tax grew 18% year-over-year (YoY), exceeding the May 2024 guidance range of 12%-16%. This result was powered by a 20% increase in Total Annual Recurring Revenue (ARR), highlighting the robust demand for the company’s global SaaS ERP platform and innovative SaaS+ offering. A standout performance came from the UK, where ARR surged by an impressive 70%, underlining the success of the company’s long-term investment in this key growth market. Net Revenue Retention (NRR) of 117% also surpassed the long-term target of 115%, reflecting strong customer retention and expanded adoption of its SaaS ERP solutions among existing clients.
Operationally, Technology One, is one of the best growth stocks to buy now, having demonstrated exceptional cash flow generation, achieving a cash-to-NPAT ratio above 100%. The company’s strong balance sheet, with $278.7 million in cash and no debt, provides significant flexibility to pursue strategic acquisitions and organic growth initiatives. Looking ahead, the company is among potential growth companies, as it has reaffirmed its ambitious goal of achieving $1 billion in ARR by FY30, effectively doubling its size every five years. Investments in R&D and the SaaS+ platform remain a priority to support this growth trajectory. The recent acquisition of Course Loop is strategically significant, enabling Technology One to enhance its One Education solution and deliver a world-first SaaS ERP covering the full student lifecycle. While the acquisition will have a negligible profit impact in FY25, it is expected to become EPS accretive by FY26.
These results underscore Technology One’s ability to scale profitably, driven by its differentiated value proposition, expanding market share, and a robust sales pipeline. With continued focus on innovation and geographic expansion, particularly in the UK, the company is well-positioned to capitalize on long-term growth opportunities and deliver sustained shareholder value.
Qantas Airways Limited (ASX: QAN)
Qantas Airways Limited’s (ASX: QAN), October 2024 market update reveals positive trading results, with both Qantas and Jetstar seeing stable demand across their networks. Jetstar Domestic is outperforming expectations with higher-than-anticipated travel demand, while Qantas Domestic continues to see improvements in load factors and corporate travel. Group Domestic revenue per available seat kilometer (RASK) is expected to increase by 3-5% in the first half of FY2025, while international RASK remains projected to decline by 7-10%. Qantas Loyalty remains strong, with at least 10% underlying EBIT growth anticipated for FY2025, although earnings may dip in the first half due to the impact of Classic Plus rewards. Fuel prices remain volatile due to geopolitical tensions, but the airline's disciplined hedging strategy is designed to mitigate risks.
Qantas is among high growth stocks as it is focused on long-term growth through significant investments in fleet renewal, new facilities, and improved customer service. The airline is receiving new aircraft, including the Airbus A220 and A321LR, to enhance passenger comfort and operational efficiency. By 2027, nearly half of Qantas and Jetstar’s narrowbody fleets will be next-generation aircraft, offering lower emissions and operating costs. The airline is also investing in international aircraft like Dreamliners and A350s. Qantas is also improving its customer experience through initiatives like revamped inflight catering, better apps, and enhanced flight credit flexibility. Additionally, loyalty members can now redeem points on Classic Plus reward seats across the domestic network starting in December 2024.
Qantas invested in its people by planning to recruit 2,000 more staff members this year. They also plan to upgrade training facilities and open a safety academy in partnership with universities. As an incentive to employees, Qantas will give $1,000 thank you payment to its non-executives. It continues to focus on sustainable aviation: it invests in projects increasing the supply of sustainable aviation fuels, which are not readily available in Australia yet. Such investments are a part of Qantas' overall efforts to reduce emissions and operational costs while supporting future growth by still focusing on restoring customer trust and maintaining solid business fundamentals.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.