These are my top ASX 200 share picks for growth right now

I'm bullish about these two stocks.

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I believe investing in S&P/ASX 200 Index (ASX: XJO) shares with strong growth potential can deliver excellent returns, but only if we invest at the right price. In this article, I'll discuss two possibilities I'm excited about today.

Both companies are trading significantly below their recent all-time highs, so I think they're looking good value, considering they continue to grow their underlying operations and increase their underlying profitability.

I think both of these stocks can become significantly larger in the years ahead. Here's why.

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel Management is one of the largest operators in the world. It has a commendable market share in the United States and Australia. The company also has operations in other key regions including Asia and Europe.

Corporate Travel aims to double its FY24 profit organically by FY29 at a compound annual growth rate (CAGR) of 15%, with acquisitions on top of that.

It aims to grow its revenue by at least 10% per annum over the next five years by winning new clients and retaining a high proportion of existing clients, and they may deliver increased activity themselves.

The company aims to limit cost growth to just 5% per annum, with revenue per full-time employee equivalent (FTE). The ASX 200 growth share hopes that earnings before interest, tax, depreciation and amortisation (EBITDA) could grow at a CAGR of 15% per annum over five years.

According to the estimate on Commsec, the Corporate Travel Management share price is valued at just 12x FY26's estimated earnings.

Xero Ltd (ASX: XRO)

Xero is one of the world's leading cloud accounting software providers, with millions of subscribers.

There are several tailwinds for the ASX 200 growth share. It's growing the number of subscribers and increasing monthly prices, which can help EBITDA, net profit, and cash flow. Ongoing worldwide digitalisation is also a strong tailwind.

The HY24 result saw Xero grow operating revenue by 21% to $800 million.

The ASX 200 growth share is looking to balance profit and growth from now on – I think if Xero can demonstrate how profitable its underlying operations are, then investors could get excited. Xero already has a gross profit margin that is creeping towards 90%.

The nature of software means that it's very cheap to replicate, and the company can expand quickly. It has grown into a number of countries, offering pleasing growth potential in places like South Africa and Canada.

In time, I think Xero could become one of the most profitable companies outside of banking and mining because of its rapid growth and global growth outlook.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management and Xero. The Motley Fool Australia has positions in and has recommended Corporate Travel Management and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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