The top ASX growth stocks that could rebound in 2026 after a brutal year

2025 has been a humbling year for growth investors.

Valuation resets, AI bubble fears, and concerns about global economic momentum have weighed heavily on once-popular ASX growth stocks.

As a result, a number of high-quality stocks have seen their share prices fall sharply.

History suggests this is often where opportunity begins. Markets tend to look forward, and when sentiment turns, beaten-down ASX growth stocks could rebound strongly.

With that in mind, here are two growth stocks that analysts think could be well placed to bounce back in 2026 after a painful year.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s shares have fallen approximately 30% in 2025 as investors reacted to its poor operating performance.

Morgans thinks that it is worth sticking with the pizza chain operator. Especially given how there are signs that the worst is now over. It said:

DMP’s FY26 AGM update was positive, in our view, given the company is on track to exceed FY26 consensus NPAT, cost out was quantified, and its gearing metrics are improving. The trading update was weak, with Same-Store Sales (SSS) growth still negative; however, we think this is somewhat irrelevant while the business transitions to its new pricing strategy to drive higher margin sales for franchisees given the noise around the short-term volume impact of less discounting (i.e. lost sales were unprofitable anyway).

While DMP’s share price has recently increased ~55% off its lows on the back of potential corporate activity, the stock is still only trading on a FY26F PE of 16x which is a ~30% discount to CKF. With improving confidence in the turnaround, we continue to think the risk reward looks attractive from here. Maintain BUY.

Morgans has a buy rating and $25.00 price target on its shares. This implies potential upside of almost 20% for investors.

Xero Ltd (ASX: XRO)

Xero has also endured a tough year, with its shares down roughly 30% in 2025.

Cautious sentiment toward software valuations and doubts over a major acquisition have overshadowed the company’s strong subscriber growth and expanding ecosystem.

Macquarie sees this as a great opportunity for investors to snap up this ASX growth stock. It said:

Mgmt is walking the walk, making data-driven decisions that invariably lead to better capital allocation outcomes. We have high conviction in >12mo story, driven by the US opportunity. Gusto and Melio are the platform for US growth and mgmt is executing quickly. Reiterate Outperform.

The broker has an outperform rating and $230.30 price target on Xero’s shares. This suggests that its shares could more than double in value in 2026.

The post The top ASX growth stocks that could rebound in 2026 after a brutal year appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.