The Best ASX Growth Stocks
to buy Now In
July 2024

Check out our industry experts’ report and
Analysis on the best Growth stocks right now on the ASX

The Best ASX Growth Stocks to buy Now In July 2024

Check out our industry experts’ report and analysis on the best Growth stocks right now on the ASX

What Are Growth Stocks?

Growth stocks are stocks growing their revenues and/or profits higher than other companies. There's no hard and fast rule as to what constitutes a growth stock, nor are there rules as to what industries they can be in (although many are classified as technology stocks). Nonetheless, any such companies experience such growth over multiple years, rather than just in the short term.

What makes them unique? They often command a premium with high multiples, such as the price-to-earnings ratios, or just higher equity values. This is because people expect them to earn a lot more in the future. Instead of paying out dividends, these companies reinvest their profits to grow even bigger and faster. This approach sets the stage for substantial increases in their stock value over time.

Why invest in Growth Stocks?

Investing in growth stocks can offer better potential for returns than other stocks on the ASX. In many instances they can give a sense of pride in that investors can feel they were a part of something major. Imagine if you invested in any of the 'Magnificent Seven' back in the 1990s, held since then and being able to boast not just in the returns but having been part of something special.

They're perfect for those looking to grow their money over the long haul, rather than seeking quick, regular income. Plus, adding these stocks to your investment mix is like spicing up a meal; it adds variety and can enhance the overall flavour.

But, remember, with the prospect of higher returns comes a higher prospect of risk. These stocks can take you on a wild ride with their ups and downs, and some may not even succeed at all. They're best suited for those who can buckle in for the long term and handle a bit of turbulence along the way.

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What to look for when investing in Growth Stocks

When exploring growth stocks, it’s essential to focus on firms with robust revenue growth, a solid profitability record, and strong cash flow. Seek out companies that have established themselves in large, expanding markets and possess a distinct competitive advantage.

The experience and effectiveness of the management team in executing the company’s strategy are also key factors to consider. Pay attention to valuation metrics such as the Price-to-Earnings (P/E), EV/Revenue and P/E-to-Growth (PEG) ratios to ensure the stock is reasonably priced. Prioritize businesses at the forefront of technological advancements or those disrupting traditional industries.

5 Best ASX Growth Stocks to Buy Now in 2024


Xero Ltd (ASX: XRO)

Xero is all about helping small & medium-sized businesses do business. The company, which has over 3 million subscribers, primarily sells accounting software that helps businesses keep books, pay bills and send invoices.


Readytech Holdings Ltd (ASX: RDY)

ReadyTech provides SaaS technology in Australia and operates in three segments: Education, Workforce Solutions and Government and Justice. It offers various cloud-based solutions that help its clients with administration and management.



Infomedia Ltd (ASX: IFM)

IFM provides cloud-based parts and service software to the global automobile industry. It has over 250,000 active users in 186 countries and it has a healthy geographical mix of revenue (37% from the Americas, 32% from the Asia-Pacific and 31% from Europe).


Breville Group Ltd (ASX: BRG)

Breville is a premium kitchen appliances business with a presence in Australia, Europe and the Americas. Breville sells nearly $1.5bn in goods each year in over 100 countries globally and caters to middle to higher-income earners.


Universal Store Holdings Ltd (ASX: UNI)

Universal Store is a chain of casual fashion stores aimed at Millennial and Gen Z customers (think 18-35 year olds). Universal Store has 79 stores across Australia, which tend to be in major shopping centres, as well as a further 20..


5 Best ASX Growth Stocks to Buy Now in 2024

Xero Ltd (ASX: XRO)

Xero offers software that helps SMEs do business. It has over 3 million subscribers, and primarily sells accounting software that helps businesses keep books, pay bills and send invoices. But it has gradually developed features useful beyond book-keeping, such as storing files, converting currencies, keeping track of inventories and creating professional quotes.

Clearly, Xero is an essential service to its customers….it’s very hard to switch it off just to save a few bucks. And what incentive is there to switch to another solution like a MYOB? Very little. Whatever few bucks would be saved, would be lost in the long run. Xero’s tools are estimated to save its customers on average 5.5 hours of manual work per week. We guess that is why its churn is less than 1%.

In FY24 – the 12 months to March 31, 2024 – the company recorded:

  • NZ$1.7bn in revenue (up 22%),
  • 4.16m subscribers (up 11% and 419,000 from 12 months prior),
  • $39.29 in average revenue per user (up 14%)
  • An 88% gross margin
  • A $174.6m profit (compared to a $113m loss in the year before).

The company believes it can grow further. It is aiming to double its revenue to NZ$3bn by FY27 and has told investors that the TAM (Total Addressable Market) is NZ$100bn. This might even be an understatement because that is just the top 3 jobs its software is used for – Accounting, Payroll and Payments. Adjacent Tasks, including other tasks such as inventory, CRM and project management, could be another $39bn.

Readytech Holdings Ltd (ASX: RDY)

ReadyTech provides SaaS technology in Australia and operates in three segments: Education, Workforce Solutions and Government and Justice. It offers various cloud-based solutions that help its clients with administration and management. ReadyTech was founded in 1998 and listed on the ASX in 2019 at $1.50 per share. Although it is off its all-time highs, it is still well ahead of its IPO price.

Organisations in all three segments of ReadyTech’s business – Education, Workforce and Government – are experiencing a growing and ongoing migration to cloud and SaaS. This digital transformation across all industries is nothing new, but what is new is that this transformation has been accelerating in the wake of COVID-19 shutdowns as demand soared for technology-driven initiatives to enable remote work, distance learning, new customer experiences and new online sales channels. We think the trend is still in the early days and that ReadyTech is poised to derive a benefit.

For FY24, ReadyTech has advised shareholders to expect organic revenue growth to be in the mid-teens and a 34-35% EBITDA margin. It is aiming to achieve over $160m in organic revenue in FY26 and says its high conviction pipeline of $28m gives it confidence that this can be achieved.

Infomedia Ltd (ASX: IFM)

IFM provides cloud-based parts and service software to the global automobile industry. It has over 250,000 active users in 186 countries and it has a healthy geographical mix of revenue (37% from the Americas, 32% from the Asia-Pacific and 31% from Europe). Infomedia can help its customers capture data, provide more personalised service to existing and would-be customers and monitor supply chains.

It has had some difficulties during the pandemic including the difficulty of business development during pandemic restrictions, the volatility in car sales and potential takeover bids falling through.

Looking to FY24, it is expecting revenue of $135-142m but has not given any other guidance besides that. Analysts covering the company expect $140.4m in revenue (up 8%), $59.4m in EBITDA (also up 8%) and 5c EPS, equating to a ~$18.8m profit (nearly double the year before).

We think the company can capitalise on several trends being adopted in the automotive industry including electric vehicles, the dealer agency business model and data-driven marketing.

Breville Group Ltd (ASX: BRG)

Breville is a premium kitchen appliances business with a presence in Australia, Europe and the Americas. Breville sells nearly $1.5bn in goods each year in over 100 countries globally and caters to middle to higher-income earners. It is headquartered in Sydney and has manufacturing facilities in China and regional offices in key markets.

Breville was listed in 1999 and has achieved growth of over 2000% since. In the last 10 years, it has gained 200%. In FY23, it generated $1.48bn in revenue (up 4%), $172m in EBIT (up 10%) and a $110.2m NPAT (up 4.2%). It recorded a 35% gross margin. The 4% revenue growth is hardly earth-shattering but follows 3 years of revenue growth of 19-25%. In 1HY24, it achieved $906m in revenue (up 2%), $131m in EBIT (up 8.2%) and a $84m NPAT (up 6.7%).

We think there are four reasons why Breville can grow. First, it’s a track record of sales growth with 14.6% CAGR in EBIT over the last seven years. While this isn’t a guarantee it can achieve the same results, it does inspire confidence. Second, the company’s experience in successfully entering new markets. The company estimates 70% of its revenue potential is unaddressed and it could ultimately achieve $9.7bn in revenue.

The third reason is the market the company is in. Breville offers premium and functional goods, targeted at consumers with higher disposable income. It is therefore less likely to be hit by a slowdown in consumer spending, at least to the extent of companies targeting lower incomes. Consumers feeling the pinch might view upfront investments in Breville’s products – coffee machines, ovens and juicers – as saving money in the long run. And consumers already with appliances and needing new ones won’t put off purchasing a new one for too long. Fourth, we observe that Breville has not had the same supply chain issues other companies have had. Unlike Kogan (ASX: KGN), Breville did not over-invest in new inventories predicting the boom would go on indefinitely.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store is a chain of casual fashion stores aimed at Millennial and Gen Z customers (think 18-35 year olds). Universal Store has 79 stores across Australia, which tend to be in major shopping centres, as well as a further 20 or so stores exclusive for particular brands like Perfect Stranger, and the group makes 14% of its sales online. Both curated third-party products and private brand products are sold in-house, although the former dominates.

It is a good business but has been hit by perceptions that its customers will cut back their spending because they feel the brunt of the cost of living crisis. We think the recent Taylor Swift shows and the merchandise spent by them (estimated to be over $60m at the concerts alone) show that they will still spend when they perceive value.

In FY23, total Sales were up $263.1m, up 26.5% overall, although like-for-like sales were only up 1.2%. It made underlying EBIT of $40.4m, up 24%) and an NPAT of $23.6m, up 15%. Not bad in the rising interest rate environment. This was because the company was better able to manage inventory and offset the costs of doing business. We are optimistic for further growth in the next 12 months as the Stage 3 Tax cuts come into effect. The revised package will put more money into the pockets of Universal Store's customer base.

Pros and Cons of Investing in Growth Stock ASX

Investing in high-growth stocks tends to be a thrilling ride towards substantial wealth creation. They're tailor-made for those eyeing long-term gains, rather than immediate cash returns. Imagine being part of groundbreaking, innovative companies - it's an exhilarating prospect!

But, it's not all smooth sailing. These stocks can be overpriced, and their high price-to-earnings ratios might not quite match up with their future growth, potentially leading to financial setbacks. They're also like rollercoasters, with their higher volatility and unpredictable futures, which can sway your returns, but not all growth stocks.

Growth investors should not expect regular dividend payouts as growth companies prefer to reinvest their profits to fuel further growth.

Growth Stocks vs. Value Stocks

Many growth stocks tend to come with a higher price tag (higher P/E ratios) but promise the thrill of capital appreciation. If you're comfortable riding the waves of higher volatility, a growth company might be your pick.

On the flip side, value stocks are the hidden treasures of the market, often undervalued but brimming with potential.

Whether you choose the path of growth stocks or value stocks depends on your personal investment style - are you a thrill-seeker or a safety-first investor? Your choice reflects your risk tolerance, investment goals, and how long you're willing to wait to see your investments grow: tolerance, investment goals, and time horizon.

How to Choose the Right ASX Growth Stocks?

Choosing the right ASX growth stocks is like being a detective in the financial world, where keen analysis and thorough research are your tools.

Find growth stocks by zeroing in on companies that have a stellar track record of increasing their revenue and profits. Look for players with a competitive edge in the market, backed by a solid management team. Dive into their financial health using ratios like P/E and PEG to figure out if you're getting a good deal.

Keep an eye out for catalysts that might rocket their growth sky-high. And remember, spreading your bets across different sectors is like having a safety net, reducing your risk while aiming for those big wins. Tailor your stock picks to align with your personal investment goals and how much risk you're up for. It's a blend of strategy, insight, and a bit of daring!

Are ASX Growth Stocks right for you?

These stocks are perfect for those who dream of high returns and aren't shy about embracing the rollercoaster ride of high-growth sectors. They're a match for investors with a vision for the long haul, ready to ride out the ups and downs of the market.

But if you prefer a smooth journey with regular income stops, like dividends, these might not be your best companions. Before you pack your investment bag, do your homework thoroughly or maybe chat with an advisor to ensure these stocks are the right fit for your financial journey. It's all about mapping your route to align with your risk comfort zone

FAQs on Investing in Growth Stocks

Growth stocks come with their own set of risks. These stocks are akin to high-speed trains in the investment world – they promise rapid growth and exciting potential, but the ride can be bumpy. Their prices tend to be more volatile, often swinging widely based on market expectations and their future earnings potential.

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