In early afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decline. At the time of writing, the benchmark index is down 0.8% to 8,796.1 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 9% to $1.68. This may have been driven by profit-taking from investors after the artificial intelligence data services company’s shares rocketed last week. Investors were buying Appen’s shares following the release of a strong quarterly update. It reported revenue of $73.4 million. This was a 10% lift on the prior corresponding period and a 33% increase on the third quarter of FY 2025. Appen’s CEO, Ryan Kolln, said: “Q4 was a strong finish to the year for both our China and Global businesses. Appen China exited the quarter with an annualised revenue run-rate growing to over $135 million – a pleasing result, providing strong momentum heading into FY26.”

Brightstar Resources Ltd (ASX: BTR)

The Brightstar Resources share price is down 23% to 48.2 cents. This has been driven by the gold explorer raising funds through a major capital raising. Brightstar has received binding commitments from tier one institutional investors to raise $175 million at a discount of 50 cents per new share. Brightstar’s managing director, Alex Rovira, commented: “The near-term development of our Goldfields Hub, as shown in our DFS 2.0, enables Brightstar to underpin its position as an emerging Western Australian gold producer with a significant growth profile that will generate outstanding financial metrics and unlock significant value for our shareholders.”

Graincorp Ltd (ASX: GNC)

The Graincorp share price is down 16% to $6.07. This has been driven by the release of guidance from the grain exporter this morning. Graincorp is now forecasting underlying EBITDA of $200 million to $240 million and underlying net profit after tax between $20 million and $50 million. These are both down materially on the prior corresponding period. The company’s CEO, Robert Spurway, said: “Record global production has created an oversupply of grain, outpacing demand growth and placing downward pressure on commodity prices for the whole market. Despite strong ECA production volumes, with ABARES estimating a 2025-26 ECA winter crop of 31.2 million tonnes (mmt), the current abundance of global supply and low grain prices have reduced incentives for growers to deliver grain to market. As a result, GrainCorp is experiencing lower margins on grain handled in FY26.”

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 7.5% to $26.78. Investors have been selling Northern Star’s shares following a huge decline in the gold price on Friday night. It isn’t just Northern Star that is tumbling today. Most ASX gold shares are falling heavily along with it this afternoon. This has seen the S&P/ASX All Ordinaries Gold index fall 7.1% so far today.

The post Why Appen, Brightstar, Graincorp, and Northern Star shares are sinking today appeared first on The Motley Fool Australia.

More reading

• GrainCorp shares slide nearly 15%. Is this ASX 200 stock now oversold?
• GrainCorp shares: FY26 earnings guidance forecasts lower profits
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 shares I would buy in February
• Why 4DMedical, Appen, Nine Entertainment, and ResMed shares are storming higher today

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 positions in and has recommended Appen. 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.

Some of the best opportunities tend to appear when sentiment turns against genuinely high-quality businesses. Share prices fall hard, confidence wobbles, and suddenly, great S&P/ASX 200 Index (ASX: XJO) shares get talked about as if something is fundamentally broken.

That’s how I see WiseTech Global Ltd (ASX: WTC) and Block Inc (ASX: XYZ) right now. Both are down sharply over the past year, but when I step back and look at what these companies actually do, I think the market is being overly pessimistic.

WiseTech Global shares

WiseTech is a company that sits right in the middle of global trade, providing mission-critical software that freight forwarders, customs brokers, and logistics providers rely on every single day.

Its CargoWise platform is effectively the operating system for global logistics. Once a customer adopts it, switching is painful, expensive, and risky. That creates the kind of stickiness and recurring revenue profile I really like in long-term growth businesses.

What often gets missed is the scale WiseTech has already achieved. It services many of the world’s largest freight forwarders, processes millions of shipments, and continues to expand its functionality through acquisitions and internal development. This isn’t a speculative product. It’s a deeply embedded infrastructure.

The share price fall hasn’t come out of nowhere. Slower growth in the core business, management and board upheaval, and highly publicised issues around the founder all damaged confidence. On top of that, the integration of a large acquisition has added complexity at a time when investors were already nervous about tech valuations.

But when I look through the noise, I see a business that is refocusing on execution. Product launches, a new commercial model, and operational integration all point to improving momentum.

For me, this feels less like a broken story and more like a reset phase.

Block shares

Block is often talked about as if it’s one product or one trend. In reality, it’s an ecosystem business with multiple growth engines.

On one side, there’s Square, which provides payments, software, and financial tools to millions of small and medium-sized businesses globally. On the other, there’s Cash App, which has evolved into a full-featured consumer finance platform with tens of millions of active users. Then there’s Afterpay, which Australian investors already know well, sitting inside the broader Block ecosystem.

What really stands out to me is how these products reinforce each other. Sellers use Square, consumers use Cash App, and Afterpay sits at the point of transaction, increasing engagement and monetisation across the platform.

Block has been caught in a perfect storm. Rising interest rates hit fintech valuations, regulatory scrutiny increased, and concerns around buy now, pay later models weighed heavily on sentiment. Even a strong operating performance hasn’t been enough to stop the sell-off.

Yet the underlying numbers tell a very different story. Cash App continues to grow users and monetisation. Square is gaining share in key verticals. The business is generating meaningful operating income and free cash flow, while continuing to invest heavily in product innovation, including AI-driven tools.

To me, this disconnect between business momentum and share price is exactly what creates opportunity.

Why I think both could beat the market

Neither WiseTech nor Block needs bold assumptions to deliver strong returns from here. They simply need to keep executing.

WiseTech benefits from global trade complexity only increasing over time, whereas Block benefits from the ongoing shift toward digital payments, integrated financial services, and platform-based ecosystems.

Both ASX 200 shares have been heavily sold off. Both businesses are still growing. And both, in my view, look far more attractive today than they did when sentiment was euphoric. That’s why these two unloved ASX 200 shares are ones I’m quietly backing to surprise investors over the next few years.

The post 2 unloved ASX 200 shares I’m tipping to beat the market appeared first on The Motley Fool Australia.

More reading

• Down 50% from recent highs: Is it time to buy these ASX stocks?
• Why buy and hold investing with ASX shares could make you rich
• Why these brokers are very bullish on the WiseTech share price
• 3 ASX 200 shares trading at 52-week lows: Are they a buy?
• Eight stocks to buy in the bruised tech sector according to RBC

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

The S&P/ASX 200 Index (ASX: XJO) is having a difficult start to the week. In afternoon trade, the benchmark index is down 0.85% to 8,795.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

4DMedical Ltd (ASX: 4DX)

The 4DMedical share price is up 6% to $3.36. Investors have been buying this respiratory imaging technology company’s shares in recent sessions after it announced the expansion of its partnership with University of Chicago Medicine. This will now include the commercial deployment of CT:VQ. 4DMedical’s founder CEO, Andreas Fouras, said: “University of Chicago Medicine is one of the nation’s most respected AMCs and a pioneer in medical innovation. Their expansion of our partnership to include CT:VQ represents powerful validation of both the clinical value our technology delivers and the strength of our commercialisation approach.”

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 5% to $3.50. This is despite there being no news out of the counter-drone technology company. However, with its shares pulling back materially last week, some investors may believe that a buying opportunity has been created. The team at Bell Potter certainly seems to think this. It recently put a buy rating and $5.00 price target on its shares. It said: “We believe DRO has a market leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team.”

New Hope Corporation Ltd (ASX: NHC)

The New Hope share price is up 2% to $4.60. This morning, this coal miner was recommended as a buy, as we covered here. Baker Young is recommending New Hope to investors. It said: “The extension of Origin Energy’s Eraring coal fired power station is a reminder that demand for thermal coal is likely to remain robust for longer than many investors believe. [..] New Hope has a strong balance sheet, and we feel the market is undervaluing NHC’s growth potential through the New Acland stage 3 development. Recently trading on a modest forecast earnings multiple in fiscal year 2026 and an attractive fully franked dividend yield, the stock screens as attractive.”

Zip Co Ltd (ASX: ZIP)

The Zip Co share price is up 2% to $2.71. This is despite there being no news out of the buy now pay later provider. But as with DroneShield, Zip’s shares have pulled back meaningfully recently. This could mean that some investors are buying the dip on Monday.

The post Why 4DMedical, DroneShield, New Hope, and Zip shares are pushing higher today appeared first on The Motley Fool Australia.

More reading

• Why analysts say Hub24, New Hope, and Xero shares are buys
• Where I would invest $2,000 in ASX shares in February
• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Buy, hold, sell: BHP, DroneShield, and Santos shares

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 positions in and has recommended DroneShield. 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.

PYC Therapeutics Ltd (ASX: PYC) has announced a massive $653 million capital raise to progress four of its drug candidates through human clinical trials.

With PYC’s value sitting at $944.8 million at the close of trade on Friday, the raise will grow the size of the company by 69.2% in one fell swoop.

New backers brought on board

The biotechnology company said on Monday that $128 million would be raised via an institutional placement to specialist life sciences investors, “led by RA Capital Management and including Perceptive Advisors, Driehaus Capital Management, MPM BioImpact, Rock Springs Capital, and RTW Investments”.

The remaining $525 million will be offered to existing shareholders as an entitlement offer, with the money to be raised at $1.50 per share, compared with the company’s last trading price of $1.60 per share.

The company’s shares have almost doubled over the past year, increasing from lows of 84 cents over the period.

PYC said in addition to the institutional placement it had received binding commitments for about $560 million in new shares, which it could choose to allocate as part of the capital raising, including if there is a shortfall in the entitlement offer.

Pipeline funded for coming years

The company said following the raise, it would be funded through to calendar 2030, “with clinical trial progress and important near-term human efficacy data expected in all four of its drug development programs”.

The four drug trials to be funded with the new money were looking into treatments for polycystic kidney disease, Phelan-McDermid Syndrome, retinitis pigmentosa, and autosomal dominant optic atrophy.

PYC Chief Executive Officer Dr Rohan Hockings welcomed the support from new and existing shareholders.

We are grateful for the support of both existing and new investors in this financing round. We look forward to seeing the extent of the impact of each of these drug candidates with disease-modifying potential in areas of major unmet patient need as we move the pipeline towards regulatory approval.

Existing shareholders would be eligible to take up three new shares for every five shares they owned.

The company added:

PYC has entered into a binding underwriting agreement with multiple existing large shareholders in the company to subscribe for up to $200m worth of new shares in the event that the entitlement offer results in the creation of a shortfall. The underwriting shareholders have agreed to not take up some of their entitlement under the institutional entitlement to make shares available to new investors.

PYC shares remained in a trading halt on Monday morning.

The post Massive capital raise to progress drug trials announced appeared first on The Motley Fool Australia.

More reading

• These three biotechs show how the sector can produce huge outsized gains, but are they still good value?

Motley Fool contributor Cameron England 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.

Shares in GrainCorp Ltd (ASX: GNC) have come under heavy selling pressure following a cautious earnings update from the agribusiness group.

At the time of writing, GrainCorp shares are down 14.86% to $6.13, extending a difficult period for the stock.

Over the past year, the share price has struggled as global grain markets remain oversupplied and margins stay under pressure.

Let’s take a closer look at the update.

What spooked investors today

In an ASX announcement released today, GrainCorp provided its first look at its FY26 earnings.

GrainCorp expects FY26 underlying EBITDA of $200 million to $240 million, reflecting softer margins across global grain markets. Underlying NPAT is forecast to be between $20 million and $40 million for the year.

Those figures exclude business transformation costs and the impact of the sale of GrainCorp Canada.

Management warned that FY26 earnings will be pressured by lower margins across the business. That reflects ongoing oversupply in global grain markets and continued pressure on export spreads.

Why margins are under pressure

GrainCorp said market conditions remain challenging across the East Coast Australia winter harvest.

Even though production volumes were strong, global grain supplies remain high. In turn, this is keeping prices low and putting pressure on margins across the supply chain.

Management noted that many growers are holding back on selling grain due to weaker prices.

As a result, GrainCorp expects margins on grain handled in FY26 to be lower, despite solid receival volumes.

Why less grain is expected in FY26

GrainCorp expects to handle between 10.1 million and 12 million tonnes of grain in FY26. This is down from 13.3 million tonnes in FY25.

The drop reflects a more normal harvest after a very strong year, along with ongoing weather uncertainty.

In its Nutrition and Energy businesses, GrainCorp expects results to be similar to FY25. However, earnings from Energy are likely to be lower due to uncertainty around US biofuels policy.

Cost control moves into focus

Management was quick to highlight cost control.

The company confirmed it is accelerating cost management initiatives while maintaining service levels to growers and customers.

GrainCorp’s balance sheet remains strong, giving it flexibility to navigate softer conditions and continue executing its longer-term strategy.

Foolish Takeaway

GrainCorp shares are deep in the red today as investors react to softer margin guidance for FY26.

The outlook highlights ongoing pressure from global grain oversupply, weak pricing, and tighter export spreads. Those headwinds are likely to weigh on earnings in the near term.

However, GrainCorp still operates critical grain infrastructure and maintains a solid balance sheet. After a huge one-day sell-off, the big question is whether the market has already priced in much of the bad news.

The post GrainCorp shares slide nearly 15%. Is this ASX 200 stock now oversold? appeared first on The Motley Fool Australia.

More reading

• GrainCorp shares: FY26 earnings guidance forecasts lower profits

Motley Fool contributor Aaron Teboneras 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.

If you are looking for some new portfolio additions, then it could be worth checking out the ASX shares named below.

They have been named by analysts as buys this week, courtesy of The Bull. Here’s what they are recommending:

Hub24 Ltd (ASX: HUB)

The team at Catapult Wealth has named investment platform provider Hub24 as a buy this week.

It has been impressed with its performance in FY 2026 and believes its outlook is positive given its increasing funds under administration. It said:

HUB24 operates an investment and superannuation platform. The company posted strong growth in the second quarter of fiscal year 2026. Record quarterly platform net inflows of $5.6 billion were up 2 per cent on the prior corresponding period and significantly higher than consensus forecasts. Excluding large migrations, platform net inflows were up 42 per cent.

Quarterly and annual net inflows lifted the company’s market share in platform administration to 9.3 per cent as at September 30, 2025, up from 7.9 per cent in the prior corresponding period. Attracting increasing funds paints a bright outlook for profits moving forward.

New Hope Corporation Ltd (ASX: NHC)

Over at Baker Young, its analysts think coal miner New Hope could be a buy this week.

It highlights that Origin Energy Ltd (ASX: ORG) is extending the life of its coal fired power station, which is good news for coal demand.

Baker Young also notes that its balance sheet is strong and is well-placed to develop the New Acland operation. It said:

The extension of Origin Energy’s Eraring coal fired power station is a reminder that demand for thermal coal is likely to remain robust for longer than many investors believe. New Hope group saleable coal production of 2.7 million tonnes for the quarter ending October 31, 2025 was up 7.1 per cent on the previous quarter. Underlying EBITDA of $107.9 million for the quarter was up 15.5 per cent on the prior quarter.

New Hope has a strong balance sheet, and we feel the market is undervaluing NHC’s growth potential through the New Acland stage 3 development. Recently trading on a modest forecast earnings multiple in fiscal year 2026 and an attractive fully franked dividend yield, the stock screens as attractive.

Xero Ltd (ASX: XRO)

Finally, analysts at Morgans are bullish on cloud accounting platform provider and have named it as a buy.

The broker thinks that recent share price weakness has created a buying opportunity for investors. It explains:

Xero is a global accounting software provider. It offers an attractive medium term growth opportunity as subscriber momentum improves and operating leverage begins to flow through the business model. The business continues to expand its footprint across key geographies, with cloud accounting penetration still well below potential, providing a long runway for adoption.

Recent cost discipline has strengthened margins. Despite a softer macroeconomic backdrop, resilient revenue growth is supported by price increases and a broader ecosystem of adjacent services. We view the current share price as an attractive entry point for long term investors.

The post Why analysts say Hub24, New Hope, and Xero shares are buys appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares highly recommended to buy: Experts
• Down 50% from recent highs: Is it time to buy these ASX stocks?
• 3 ASX 200 shares I would buy in February
• These were the worst-performing ASX 200 shares in January
• How to turn $250 a month into a $500,000 ASX share portfolio

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With February now underway, I think it’s a good time to think about putting fresh money to work rather than letting it sit idle. If I had $2,000 to invest right now, I wouldn’t try to spread it too thin or chase anything speculative. I’d focus on a small number of growth-oriented ASX shares where I think the risk–reward looks attractive from here.

These are three stocks I’d be comfortable backing at the moment.

Zip Co Ltd (ASX: ZIP)

Zip Co is an ASX share I think the market has been overly harsh on.

The share price has been dragged down alongside the broader sell-off in tech and fintech, even though Zip itself has been doing the hard work operationally. It’s no longer loss-making, cash flow has improved materially, and management has been far more disciplined around costs and credit.

What I like most is that Zip is still growing, but now with a much clearer focus on profitability rather than headline user numbers. If sentiment toward growth stocks improves even modestly, I think Zip could re-rate meaningfully from current levels.

Nanosonics Ltd (ASX: NAN)

Nanosonics is a higher-risk ASX share pick, but one I think has genuine upside if execution improves.

The medical device company already has a strong installed base with its trophon products, and that creates a recurring revenue stream through consumables and upgrades. On top of that, the approval of newer products like trophon3 and the CORIS system gives Nanosonics multiple shots at reigniting growth over the next few years.

The share price reflects a lot of scepticism right now. For me, that’s exactly why it’s interesting. If adoption of these newer platforms plays out as management expects, today’s valuation could end up looking overly pessimistic.

Catapult Sports Ltd (ASX: CAT)

Catapult Sports is the kind of niche technology business I think about owning when markets are nervous.

Catapult operates in elite sports performance and analytics, an area that continues to grow as teams become more data-driven. Its software is deeply embedded once adopted, which supports high customer retention and recurring revenue.

The business has also been steadily improving margins and cash generation, which matters far more to me now than rapid top-line growth alone. With the share price well off its highs, I think Catapult offers an appealing mix of long-term relevance and near-term recovery potential.

How I’d think about the split

With $2,000, I’d be comfortable splitting the investment roughly evenly across these three ASX shares. That gives exposure to fintech, healthcare technology, and sports analytics without relying on a single outcome.

All three carry risk, but they’re risks I think are already reflected in the share prices. For me, February looks like a reasonable time to start building or adding to positions like these.

The post Where I would invest $2,000 in ASX shares in February appeared first on The Motley Fool Australia.

More reading

• These were the worst-performing ASX 200 shares in January
• Buy local: 3 Australian innovations to add to your watch list
• Down 40% to 50%! Why I think these ASX growth shares are strong buys
• 3 ASX tech shares I would buy with $5,000
• Top Australian shares to buy right now with $2,000

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

Ora Banda Mining Ltd (ASX: OBM) shares are tumbling today.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold stock closed Friday trading for $1.28. In morning trade on Monday, shares are swapping hands for $1.18 apiece, down 7.8%.

For some context, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 0.7% at this same time.

In a better comparison of golden apples to golden apples, Ora Banda shares are moderately outperforming the S&P/ASX All Ordinaries Gold Index (ASX: XGD), which is down 8.9% this morning.

This comes as the gold price continues to get hammered in the wake of US President Donald Trump’s appointment of Kevin Warsh to succeed Jerome Powell as Federal Reserve chairman. Gold is currently trading for US$4,801 per ounce, down more than 21% since Thursday.

Warsh’s focus on combating inflation has traders pricing in higher US interest rates. That could throw up numerous headwinds for gold, which doesn’t pay a yield itself and is priced in US dollars.

That’s the macro picture.

Now here’s the latest from the ASX 200 gold miner.

Ora Banda shares on the growth path

Though pressured by the falling gold price today, Ora Banda mining shares could get longer-term support after the miner announced another batch of “exceptional drill results”.

The results come from Round Dam, an 18-kilometre-long mineralised trend located within the company’s Waihi Project, in Western Australia. Ora Banda has been actively exploring the open-pit and underground mining potential along a 7.5-kilometre section of this trend.

Ora Banda has now completed 280 holes for 53,000 metres of drilling from its 62,000 metre Phase 1 exploratory program.

This morning, the miner reported it had identified up to six subparallel continuous gold lodes along the trend. The company said that early indications are that the Round Dam trend will be “highly amenable” to bulk tonnage open-pit mining with the added potential for high grade shoot development.

What did management say?

Commenting on the latest gold results that could help boost Ora Banda shares over the longer term, managing director Luke Creagh said, “At Round Dam we are looking at the potential for large-scale surface mining opportunities, enhanced by multiple, newly identified high grade shoots.”

Creagh added:

Excitingly, the Round Dam Project is located only 15 kilometres from our existing Davyhurst processing infrastructure, with the potential for rapid resource development.

Today’s Round Dam results are another highlight in the company’s ongoing $73 million FY26 exploration strategy to target projects with the potential to become mines in short order supporting the company’s organic growth strategy.

Despite now sinking a painful 29.8% since Thursday’s close, Ora Banda shares remain up 85.2% since hitting one-year closing lows on 1 August.

The post Tumbling gold price pressuring Ora Banda shares despite new high-grade results appeared first on The Motley Fool Australia.

More reading

• Why is this ASX 200 gold stock crashing 15% today?
• Why Brainchip, Galan Lithium, Iluka, and Ora Banda shares are tumbling today
• Why I think ASX 200 gold shares like Newmont and Northern Star will keep surging higher in 2026
• Up 154% since August, Ora Banda shares jumping again today on ‘exciting’ gold results

Motley Fool contributor Bernd Struben 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.

ASX growth shares that are delivering rapid progress in their revenue and profit can be really attractive investments.

Compounding is a very powerful force and helps a business grow into a much larger company after a few years.

I’m going to look at two ASX growth shares that are expected to grow their earnings and are rated as buys by broker UBS.

REA Group Ltd (ASX: REA)

This company is the owner of realestate.com.au, Australia’s leading property portal. It also owns a number of other Australian property-related businesses and a few international businesses, including REA India.

UBS rates REA Group as a buy with a price target of $248. A price target is where analysts think the share price will be in 12 months from the time of the investment call. That means the broker reckons the REA Group share price could climb by around 30% in the next year.

The broker said that in 2026, investors will be seeking clarity around potential long-term impacts of AI on the broader industry and its pricing power. There is also wider uncertainty impacting volumes, with inflation remaining sticky and expectations around potential rate hikes in Australia.

UBS says it sees an economic moat in the ASX growth share’s customer experience, brand, uniqueness of product and complexity of the ecosystem. The broker thinks there is potential for the negative AI narrative to unwind over this year.

The broker also indicated that current global developments (such as Zillow partnering with OpenAI), suggest a “supportive environment where AI platforms are partnering with established players, rather than looking to displace”.

UBS thinks the company can extract strong yield growth (price increases) in 2026 and this could alleviate some market concerns. The broker also suggested that potential rate hikes could lead to more distressed selling by some property owners, which may help volumes. Currently, the broker is expecting a slight decline of volumes (1.5%) in FY26.

Nextdc Ltd (ASX: NXT)

Nextdc is a leading data centre developer and provider, with locations in a number of cities including Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Darwin, Port Hedland, Sunshine Coast, Tokyo , Kuala Lumpur and Auckland.

The business is rated as a buy by UBS, with a price target of $22.55. That suggests a possible rise of close to 70% over the next year.

UBS has noted that in the first six months of FY26, it contracted approximately the same level of MW (167MW) as the prior four years cumulatively and also more than doubled the record contracted MW in FY25 (72MW).

The broker estimated that 94MW of uncontracted capacity exists within existing assets in NSW and Victoria, meaning there’s more room for large-scale contracts.

UBS suggested one of the reasons why the market is uncertain about the ASX growth share at the moment is its balance sheet capacity. The broker forecasts net debt could peak at $5.5 billion in FY28, compared to its facility for $6.4 billion.

The broker estimates that around 60MW could be built and fitted with the current debt facility.

UBS noted that its price target is based on its existing operations as well as the developed application-approved land bank.

The post Experts rate these 2 ASX growth shares as buys this month! appeared first on The Motley Fool Australia.

More reading

• Why these beaten-down ASX shares are worth a second look
• Why buy and hold investing with ASX shares could make you rich
• Eight stocks to buy in the bruised tech sector according to RBC
• Is AI a real threat to CAR Group and REA Group shares?
• The incredible ASX stock I’d hold for 10 years without watching the share price

Motley Fool contributor Tristan Harrison 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.

Shares in KMD Brands Ltd (ASX: KMD) were trading higher after the company posted a sizeable increase in sales for the first half of the year.

In a statement to the ASX on Monday morning, the company said that sales at its Rip Curl stores were up 5.6% for the five months to December 25 compared with the same period the previous year, and were up 12.9% across its Kathmandu stores.

Sales of its Oboz footwear line were up 4.5% for the period.

Its total group sales were 7.9% higher for the first five months of the year.

Outlook positive

The company went on to say:

Group wholesale sales for the five months of FY26 year-to-date are 9.4% above last year. Forward wholesale order books remain stable and slightly above last year. In-season buying from key accounts has also been positive.  

The company said its group gross margin year to date was 56.7%, which was about 100 basis points below the same period last year due to the increased amount of promotional activity, “and continued focus by all brands to optimise mix and sell through aged inventory”.

KMD Brands Managing Director Brent Scrimshaw said the company was performing well.

We are pleased with the group’s early progress in the execution of its Next Level transformation strategy, in particular trading over the critical Black Friday and Christmas periods. Whilst we are still at the early stages of our transformation, we are encouraged by the improved performance of Kathmandu, with an adjusted flow of fresh innovation planned in the second half which we believe will strengthen our ability to expand gross margin over time. We continue to focus on optimising the balance between sales and gross margin while actively managing our inventory investment.

The company said that it expected first half underlying EBITDA to be in the range of $8 to $11 million, up from $3.9 million for the same period last year.

RBC Capital Markets said the market update was neutral for the company’s shares, with the sales growth figures “tracking ahead of expectations across all segments, but “with consensus expectations currently at the top-end of KMD’s EBITDA guidance we expect operating expenses are currently tracking ahead of expectations”.

KMD shares were 6.3% higher at 25.5 cents in early trade before settling back to be steady at 24 cents.

The company was valued at $160.1 million at the close of trade on Friday.

The post This retailer has posted a strong increase in sales across the first half appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.