2 ASX growth shares that could generate huge returns for investors

Appen Ltd (ASX:APX) and this ASX growth share could provide strong returns for investors in 2021. Here’s what you need to know…
The post 2 ASX growth shares that could generate huge returns for investors appeared first on The Motley Fool Australia. –

zig zaggy green arrow with an american note in the background

Are you looking for growth shares to buy?

If you are, then you might want to look at the two top growth shares listed below. Here’s why they are highly rated:

Appen Ltd (ASX: APX)

This artificial intelligence (AI) data services company could be a ASX growth share to buy right now. Especially given the recent weakness in the Appen share price, which has left it trading 61% lower than its 52-week high.

This weakness has been driven by a disappointing performance in FY 2020 because of the pandemic. A number of tech giants that Appen counts as customers have put off major AI projects during COVID-19. This has led to a reduction in demand and lower than expected growth rates.

While this is disappointing, this weakness should only be temporary and demand is expected to increase materially once the pandemic passes. And thanks to its leadership position in the market, Appen is well-positioned to capture this demand.

Last week Citi retained its buy rating and $30.90 price target on the company’s shares. Based on the latest Appen share price, this implies potential upside of almost 83% over the next 12 months.

ELMO Software Ltd (ASX: ELO)

Another ASX growth share to consider buying is ELMO. It is a cloud-based human resources and payroll software company.

It streamlines a range of processes such as employee administration, recruitment, on-boarding, remuneration, and payroll through a single a unified platform.

Demand has been strong for its platform in recent years and this has continued in FY 2021. During the first half, the company reported a 42.8% increase in annualised recurring revenue (ARR) to a record $74.2 million.

Positively, this is still only a very small slice of its addressable market. At present the company is operating in both the ANZ and UK markets, where it has $2.4 billion and $6.8 billion opportunities, respectively. And thanks to its jurisdiction agnostic platform, ELMO has the option to expand into other regions in the future.

Morgan Stanley is positive on ELMO’s growth prospects. It has an overweight rating and $9.70 price target on its shares. Based on the current ELMO share price, this equates to potential upside of 70% over the next 12 months.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX growth shares that could generate huge returns for investors appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!