ASX stocks across the board have come under pressure in recent months. Investors have been reassessing valuations amid concern over how artificial intelligence could disrupt traditional business models.
That weakness has pushed a number of high-quality companies well below recent highs. For long-term investors, that could make March a good time to take a closer look at some market leaders trading at more attractive valuations.
Here are three of the best ASX stocks that might be worth considering right now.
REA Group Ltd (ASX: REA)
REA Group is one of Australia's most dominant digital platforms, operating the realestate.com.au property portal and a growing suite of property data and financial services tools.
The company benefits from a powerful network effect. With millions of monthly users and strong engagement, realestate.com.au remains the go-to destination for buyers and sellers.
The ASX stock has also demonstrated significant pricing power, with revenue growth often driven by higher listing yields and premium advertising products. Importantly, the business is highly profitable, with strong margins and excellent returns on capital.
REA is closely tied to property market activity. When listing volumes fall, growth can slow. In its recent half-year result, national listings declined and net profit dropped due partly to one-off factors.
There are also emerging competitive risks, including increased competition from other property platforms.
Despite the recent pullback, 27% over 6 months, most analysts remain cautiously optimistic. The 12-month price target hovers around $220, implying 30% potential upside at the time of writing.
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Goodman Group (ASX: GMG)
This $52 billion stock is a global industrial property giant that owns, develops, and manages logistics facilities and business parks around the world.
The company is increasingly positioning itself as a major player in digital infrastructure. Data centres now make up a significant portion of its development pipeline, reflecting booming demand from cloud computing and artificial intelligence workloads.
With a global property portfolio valued at more than $80 billion and occupancy above 96%, Goodman enjoys strong underlying fundamentals.
As a property developer, Goodman remains exposed to interest rates and broader economic cycles. Higher financing costs or slowing development activity could weigh on earnings.
Broker sentiment remains constructive. Analysts at Macquarie have retained their outperform rating and $32.20 price target on this ASX stock. This points to a potential gain of 20% over 12 months.
Xero Ltd (ASX: XRO)
Xero is one of the world's leading cloud accounting software providers for small and medium-sized businesses.
The company has built a powerful subscription-based platform used by millions of businesses globally. Its ecosystem of accountants, add-on apps, and financial services helps create strong customer retention and recurring revenue.
Xero is also investing heavily in artificial intelligence features that could expand its product offering and help it capture a share of the rapidly growing global SaaS market.
Like many software companies, Xero has been caught up in the recent tech sell-off as investors worry that AI could disrupt traditional software models. The ASX stock is also investing heavily in growth initiatives, which can pressure margins in the short term.
Despite near-term volatility, many analysts remain positive on Xero's long-term outlook as it expands internationally and deepens its product ecosystem. UBS is very bullish. It currently has a buy rating and $174 price target on Xero's shares, which implies potential upside of over 117%.
Foolish Takeaway
Market pullbacks can create opportunities to buy high-quality companies at more reasonable prices. REA Group, Goodman Group, and Xero each operate leading platforms in large global markets.
While short-term volatility may continue, investors with a long-term horizon may find these ASX leaders worth considering in March.
