Guzman Y Gomez (ASX: GYG) shares could be one of Australia’s top shares to consider right now. It could offer the right mix of revenue growth and rising profit margins to unlock great returns for investors.

In the future, it may be rare for GYG shares to trade at around $20, given how quickly the underlying business is growing. I also think the business is unlikely to fall more than 20% within 12 months, as it has done.

The Mexican food business looks like a good buy and one of Australia’s top shares for the following reasons.

Strong sales growth

I believe every great business needs to be able to deliver strong compounding. In other words, the company can justify excellent, sustainable share price returns because it’s increasing its intrinsic value at a good pace as revenue and earnings climb.

A company growing earnings at 2% per year is not going to cut it if we’re trying to outperform the market over the long-term.

GYG makes revenue from both its owned restaurants and the franchise ones. One of the best signs of the company’s financial progress is its growing total network sales, which is partly driven by its expanding network of restaurants across Australia and Asia.

We continued to see how quickly the business is growing in the FY26 third quarter.

Australian network sales grew by 19.7% year-over-year to $320.4 million, while Asian network sales grew by 18.7% to $21.5 million. Across Australia and Asia, its comparable sales growth was 6.6%, a strong rate of organic growth for existing restaurants.

That quarterly update also showed the total number of Australian restaurants grew by 14.7% year-over-year to 242, Singaporean restaurants grew by 15% to 23, and Japanese restaurants increased 25% to five.

In the ultra-long term, the company aims to reach 1,000 Australian locations over the next 20 years. It is expected to open 32 Australian restaurants in FY26, showing it’s making solid progress towards that long-term goal.

If its overall network sales can continue growing in the teens in percentage terms for the foreseeable future, it’ll very likely translate into rising profit, making it one of Australia’s top shares, in my view.

Growing profitability

Investors usually value a business based on how much profit it’s generating and could make in the future.

We’ve already seen that the company’s network sales are growing quickly and its profit is growing even faster. Operating leverage is a very powerful force for a great company.

In the FY26 half-year result, network sales grew 18% to $681.8 million, segment underlying operating profit (EBITDA) grew 23.3% to $33 million, profit before tax (PBT) grew 26.2% to $19.2 million and net profit grew 44.9% to $10.6 million.

That HY26 result saw the segment underlying operating profit (EBITDA) as a percentage of network sales improve by 0.6 percentage points to 6.1%. In the long-term, the company thinks this operating profit margin could improve to 10%, which would be a significant improvement over time and implies the bottom line can continue its fast growth.

Significant improvement of profit margins adds to my belief that this business is one of Australia’s top shares.

Valuation

According to Commsec’s projection, the company is valued at 32x FY28’s estimated earnings.

I think this is a great time to invest. But, it’s not the only ASX share with a very compelling future.

The post A rare buying opportunity in 1 of Australia’s top shares? 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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are a number of ASX shares that could be excellent buys right now based on their valuations and potential growth.

When the valuation makes sense, businesses that are growing earnings rapidly could be very attractive buys.

When one analyst rates a business as a buy, that’s interesting. When numerous experts rate a stock as a buy, it could be a compelling opportunity. Let’s look at two ASX shares with significant backing.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is one of the ASX leading tech companies. It provides enterprise resource planning (ERP) software to various customers such as government entities, local councils, companies, universities and so on.

According to the Commsec collation of analyst opinions, there are currently 13 buy ratings on the business, as well as one hold rating and two sell ratings.

The company is delivering impressive growth year over year. It has a net revenue retention (NRR) goal of 115%, which means it’s aiming to grow its revenue from its existing client base by 15% each year. At that pace, revenue would double in size over five years.

The ASX share is winning more clients in different markets, across both geographies and sectors. It’s growing in the UK, which is a large target market and has similar institutions to Australia, so its software offerings could resonate with potential customers.

I like how the company invests significantly in research and development, which helps it provide the best offering for clients. Additionally, AI tools could help the business lower its costs/speed up its development.

According to the projection on Commsec, the TechnologyOne share price is valued at 51x FY27’s estimated earnings.

Zip Co Ltd (ASX: ZIP)

Zip is one of the leading buy now, pay later businesses in Australia and New Zealand.

According to the Commsec collation of analyst opinions, there are currently 12 buy ratings on the business, with no other ratings.

The ASX share is experiencing ongoing solid growth in the US, which is now the company’s core growth market and it’s seeing rising profit generation.

In the FY26 third quarter, Zip reported total income growth of 20.2% to $335.2 million and operating profit (cash EBTDA) growth of 41.5%. Revenue is growing at a strong pace and profit margins are increasing, which is a great sign for the company’s future net profit.

The company has seen an increase in net bad debts, so that’s something to keep an eye on. But, it’s a lot cheaper than it was in October 2025 – it’s down more than third since then.

According to the projection on Commsec, the Zip share price is valued at 33x FY26’s estimated earnings.

The post 2 ASX shares highly recommended to buy: Experts appeared first on The Motley Fool Australia.

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

If you are looking for exposure to the healthcare sector and have a high tolerance for risk, then it could be worth considering the ASX share in this article.

That’s because the team at Bell Potter believes it could be a buy with huge upside potential.

Which ASX healthcare share?

The share that Bell Potter has initiated coverage on this week is Lumos Diagnostics Holdings Ltd (ASX: LDX).

It is a commercial-stage point-of-care (POC) diagnostics company that is busy developing rapid testing solutions for frontline healthcare settings.

Bell Potter believes the company’s FebriDx product is worth getting excited about. It explains:

FebriDx is a rapid POC test built around a simple clinical question, Does the patient have an acute respiratory infection (ARI) requiring antibiotics? Unlike other assays, FebriDx assesses the patient’s immune response to distinguish bacterial from nonbacterial illnesses after 10 minutes, via a single fingerstick blood sample. 

The dual biomarker (CRP/MxA) rapid read out supports antibiotic stewardship through real-time decision making that ensures lower and more effective antibiotic use. The journey has been long and has had some setbacks, but now there is a clear path to commercial success following FDA approval with CLIA waiver and reimbursement from CMS that delivers a starting gross margin of 60% and capacity to increase it to 80% over time.

The good news is that the broker highlights that this product gives the ASX healthcare share an estimated US$1 billion market opportunity. It adds:

The CLIA waiver for FebriDx in March 2026 expanded access to eligible sites by c.8.5x from c.32k to c.277k sites via enabling lower-complexity clinics to perform the FebriDx rapid diagnostic test. The waiver provides access to clinics that are a better fit for FebriDx with lower-complexity front-line settings where FebriDx’s rapid, analyserfree workflow is better aligned with real-time prescribing decisions. LDX claims it is now exposed to c.80m annual patient visits to Urgent Care / Primary Care Physicians which creates a c.US$1b opportunity.

Big potential returns

According to the note, the broker has initiated coverage on Lumos Diagnostics shares with a buy rating and 25 cents price target. 

Based on its current share price of 8.6 cents, this implies potential upside of 190% for investors over the next 12 months.

Commenting on its initiation, Bell Potter said:

We initiate coverage with a BUY recommendation and a 10-yr DCF-based valuation/ TP of $0.25/sh, assuming a WACC of 13% and TG of 3.5%. Our TP offers material upside which relies on ensuring deep utilisation by WellStreet and wider adoption of FebriDx over time.

The post Top broker just put a buy rating on this ASX healthcare share appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.