These growth shares are rated highly by analysts…
The post 2 ASX growth shares analysts rate as buys appeared first on The Motley Fool Australia. –
Looking for growth shares to buy? Then you might want to consider one of the ASX shares listed below.
Here’s why they have been tipped as growth shares to buy:
NEXTDC Ltd (ASX: NXT)
The first ASX growth share to look at is this leading data centre operator. NEXTDC has been benefiting greatly from the structural shift to the cloud. While this accelerated during the pandemic, it has been going on for years and still has a long way to go.
In light of this, NEXTDC continues to experience growing demand for data centre capacity. In fact, a significant amount of future capacity is under option, giving the company great visibility on its future earnings.
This could be supported by management’s plan to expand into the Asia market. It has its eyes initially on the Singapore and Tokyo markets, where it would have huge opportunities to grow into in the future.
Goldman Sachs is very positive on the company. It currently has a buy rating and $14.80 price target on its shares.
The broker commented: “We remain high-conviction on the growth profile ahead, forecasting +37MW contract wins across FY22-23E (=65% conversion of options). Combined with recent share price underperformance, this gives an attractive growth adjusted valuation. We reiterate our Buy (on CL) on NXT, the most compelling growth story in our coverage.”
PointsBet Holdings Ltd (ASX: PBH)
Another ASX growth share to look at is PointsBet. It is a leading sports betting company with operations in both the ANZ and US markets.
These operations are currently generating significant revenue thanks to the growing popularity of mobile sports betting and innovative products.
However, despite this, the company is still only scratching at the surface of its massive US market opportunity. For example, Goldman Sachs notes that the US sports betting market is forecast to grow at a compound annual growth rate of 40% out to 2033.
In light of this and its strong market position, Goldman has a buy rating and $17.20 price target on its shares.
Goldman said: “We like PBH due to i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market which we forecast to be a US$53 bn TAM opportunity at maturity, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to long-run sustainable margins in Aus and the US which was reaffirmed by the strong margin result in 3Q21.”
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.