Here are two stocks for investors who are just venturing into stock markets. Potentially stable, these are the best growth stocks to buy now
ResMed Inc. (ASX: RMD)
ResMed Inc. (ASX: RMD) delivered robust Q1 FY2025 results, drivean by strong demand across its product portfolio and strategic execution. Revenue increased by 11% on a constant currency basis, reflecting solid growth in its Sleep and Breathing Health segment and Residential Care Software business. Regionally, revenue in the U.S., Canada, and Latin America (excluding software) grew by 11%, while Europe and Asia-Pacific markets reported a 10% increase. Residential Care Software revenue expanded by 12%, supported by ongoing organic growth. Gross margin improved by 420 basis points, driven by operational efficiencies, lower component costs, and higher average selling prices. On a non-GAAP basis, gross margin rose by 320 basis points. SG&A expenses increased by 7%, primarily due to higher employee-related costs. However, SG&A expenses as a percentage of revenue declined to 19.5% from 20.2% in the prior year.
Income from operations rose 34%, with non-GAAP operating income up 27%, reflecting strong topline growth and margin expansion. Net income was $311 million, equating to diluted EPS of $2.11. Non-GAAP net income increased 35% to $325 million, with EPS at $2.20, supported by sales momentum and margin gains. Operating cash flow stood at $326 million, highlighting ResMed's cash-generative profile. The company is among high growth stocks while celebrating 35 years of innovation and 25 years on the NYSE, unveiling its 2030 growth strategy at its Investor Day. Key initiatives include accelerating innovation, operational excellence, and financial strength to drive shareholder value. ResMed aims to support over 500 million people by 2030. ResMed rebranded its reporting segments to Sleep and Breathing Health and Residential Care Software, with consistent reporting methodology. The launch of innovative products, including the AirTouch N30i fabric mask and AI-integrated solutions, underscores its focus on personalized, digital sleep health. The combination of market expansion, product innovation, and operational discipline positions ResMed as a leader in sleep and respiratory care with a clear path for sustained growth.
Xero Limited (ASX: XRO)
Xero Limited (ASX: XRO) delivered a strong performance for the first half of FY25, with operating revenue increasing by 25% to $995.9 million, supported by both subscriber growth and higher ARPU. The company’s annualized monthly recurring revenue (AMRR) rose by 22%, reaching $2.2 billion. This growth was bolstered by the removal of 160,000 long-idle subscriptions, a program completed in H1 FY25, which had minimal impact on overall revenue. In terms of customer retention, Xero’s churn rate remained low, at just 1%, underlining the platform’s resilience and customer value.
Xero is one of the top growth stocks having continued to see robust results across its key markets. In Australia and New Zealand, revenue grew by 24%, reaching $567 million, with double-digit growth in both regions. Subscriber additions were strong, with 84,000 new customers in Australia and 9,000 in New Zealand, bringing total subscribers to 2.5 million. The international market, which includes the UK, North America, and the Rest of World, also saw solid growth, contributing $428.8 million in revenue, up 25% year-over-year. Despite a slight dip in subscriber numbers due to the removal of inactive accounts, key markets like the UK and North America showed positive additions in subscribers.
In addition to its organic growth, Xero made strategic acquisitions, such as its purchase of Sy Analytics to enhance reporting and analytics capabilities. It also extended its partnership with Gusto to offer an integrated payroll solution for US customers. Xero’s disciplined capital allocation and focus on customer solutions continue to drive its strategic priorities, positioning the company for further growth. Looking ahead, operating expenses are expected to be around 73% of revenue for FY25, with product design and development costs to remain in line with FY24 levels.
Source: Company’s Report
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