2 ASX 200 shares that could be top buys for growth

I’m a big advocate for owning growing businesses because rising profit over time is likely to turn into a higher share price (and bigger dividends). There are some great S&P/ASX 200 Index (ASX: XJO) shares available for Aussies to invest in.

However, a number of the ASX’s best businesses have seen their share prices drop, which undoubtedly has made them cheaper on an earnings multiple basis, also known as the price/earnings (P/E) ratio.

Buy-the-dip investing won’t always lead to incredible results, but I think it makes a lot of sense with growing businesses like the two below.

Xero Ltd (ASX: XRO)

Xero is one of the world’s leading cloud accounting businesses with a very impressive presence in English-speaking countries. It now has over 4.5 million subscribers across countries like Australia, New Zealand, the UK, the US, South Africa and so on.

It has an incredibly high gross profit margin of 88.5%, which means most of the new revenue it creates can turn into gross profit which can be used for growth spending or fall onto the bottom line.

In the FY26 first-half result, it reported revenue growth of 20% to $1.2 billion, net profit growth of 42% to $135 million and free cash flow growth of 54% to $321 million.

If the ASX share can successfully crack the competitive, but huge, US market in a major way, Xero could become significantly more profitable.

The ASX 200 share looks a lot better value after the Xero share price’s fall of more than 40% over the past six months, as the chart below shows. I think it looks much better value today.

Guzman Y Gomez Ltd (ASX: GYG)

The Mexican food business is another Australian company that has successfully captured a good market share in the local market, and now it’s growing overseas.

It has over 220 locations in Australia, as well as 22 in Singapore, five in Japan and seven in the US. The business has ambitious plans to roll out dozens of restaurants each year in Australia and eventually reach 1,000 locations, implying strong growth ahead.

The ASX 200 share’s total network sales are growing at a strong rate in Australia and overseas, with growth of 18.5% to $330.6 million in the three months to September 2025, supported by mid-single-digit comparable sales growth from existing restaurants.

GYG is expecting its profit margins to increase as it becomes larger, partially thanks to the power of operating leverage. I think this will help the company’s bottom line significantly, while it continues investing for long-term growth.

If the ASX 200 share can become profitable in the US and continue expanding its overall location count and network sales, I believe the business will have a very positive future.

As the above chart shows, the GYG share price has declined by more than 40% in 2025 to date.

The post 2 ASX 200 shares that could be top buys for growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.