Some of my favourite ASX shares to own are ones that are compounding in scale at a fast pace. When revenue is increasing rapidly, that's almost certainly going to come with scale benefits as time goes on.
We're going to look at two of the most highly rated businesses on the ASX right now. It's interesting when one analyst likes a business, but its an even better sign when numerous experts think a business is a buy. Of course, forecasts are not guaranteed.
For me, I like how both of the businesses are among the leaders in the local market, with successful overseas expansion that could suggest a significant growth runway in the long-term.
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Xero Ltd (ASX: XRO)
Xero is one of the leading ASX tech shares with its accounting, business analysis and taxation reporting software.
The company has carved out a significant market share in New Zealand and Australia. It's also growing in places like the UK, South Africa, Singapore, the US and so on. It has an extremely loyal subscriber base, which gives the company the confidence to hike its subscription price.
A rising average revenue per user (ARPU) helps a number of metrics including annualised monthly recurring revenue (AMRR), the total lifetime value (LTV) of subscribers and obviously operating revenue.
In the FY26 result, Xero reported that its total number of customers rose 11% to 4.9 million, ARPU grew 23% to $55.44, AMRR grew 37% to $3.27 billion and LTV increased by 17% to $21 billion. Operating revenue increased by 31% to $2.75 billion.
The ASX share's net profit decreased in FY26, but I think it will rise rapidly for the foreseeable future now that the Melio acquisition has been concluded and integrated.
According to CMC Invest, there have been nine different analyst ratings on the business in the last three months, with eight of them being a buy. The average price target of those nine ratings is $126.57, which at the time of writing suggests a possible rise of close to 70% in the next year.
Guzman Y Gomez (ASX: GYG)
GYG is a Mexican food business, which has proven a big hit in Australia to date. It already has well over 200 locations in Australia and it's aiming for over 1,000 locations within the next 20 years.
On top of that, the business has a presence in both Singapore and Japan. It now has 24 restaurants in Singapore and it had five locations in Japan at the end of the FY26 third quarter.
The FY26 third-quarter showcased its excellent growth rate, with network sales growth of around 20% in Australia and growth of 15% in Asia.
It recently took the decision to end its growth efforts in the US because of the expected cost of reaching good profitability for that market. But, this should help the company's bottom line for the foreseeable future.
The ASX share expects the Australia and Asia division to generate $85 million of underlying operating profit (EBITDA), representing 29% growth year over year.
According to the forecast on CMC Invest, GYG could generate 64.2 cents of earnings per share (EPS) in FY28 putting it at just over 30x FY28's estimated earnings.
On CMC Invest, there have been 10 analyst ratings on the business within the last three months, with eight of those being a buy. The average price target of those 10 ratings is $24.33, suggesting a possible rise of 23% over the next year.
