2 extraordinary ASX shares to buy in 2021

Here’s why Pushpay Holdings Ltd (ASX:PPH) and this extraordinary ASX share could be ones to buy in 2021…
The post 2 extraordinary ASX shares to buy in 2021 appeared first on The Motley Fool Australia. –

hands holding 5 stars

The Australian share market is home to a large number of ASX shares that are capable of providing strong returns to investors over the long term.

But having so much choice can make it hard to decide which ones to buy ahead of others.

To help you decide which ones to add to your portfolio, I have picked out two extraordinary growth shares that are highly rated. They are as follows:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a donor management and community engagement provider to the church market. Due to the quality of its platform, its leadership position, the shift to a cashless society, and social distancing, Pushpay has experienced a significant increase in demand for its platform over the last 12 months.

This has even caught management by surprise, leading to the company upgrading its earnings guidance for a second time last last year.

Instead of operating earnings of US$54 million to US$58 million, management is now forecasting FY 2021 operating earnings of between US$56 million and US$60 million. This represents growth of 123% to 139% year on year.

Supporting its growth has been the US$87.5 million acquisition of church management system provider Church Community Builder. This has led to the launch of the ChurchStaq platform, which is a combination of its Pushpay and Church Community Builder software. It brings together digital giving, donor development, church apps, and church management software (ChMS) to deliver a fully integrated engagement platform.

One broker that is very positive on Pushpay is Goldman Sachs. It believes the company is in a strong position for growth over the medium term. So much so, it has a conviction buy rating and ~$2.59 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX share to look at is Xero. It is a leading cloud-based business and accounting software provider to small and medium sized businesses.

Over the last few years it has become an indispensable full service small business solution for millions of businesses across the world. In fact, at the end of the first half of FY 2021, Xero had grown its subscribers by 19% year on year to 2.45 million.

This ultimately underpinned a 21% increase in half year operating revenue to NZ$409.8 million and a 15% lift in total subscriber lifetime value (LTV) to NZ$6.2 billion.

Since the release of its half year results, Xero has raised US$700 million via a notes offering to support its growth. There is speculation this could be for a major acquisition in the near future. Especially given how Xero has a track record of making complementary acquisitions, such as Waddle, that bolster its offering.

Goldman Sachs is also a fan of Xero. It currently has a buy rating and $157.00 price target on its shares. Goldman believes Xero can grow its subscribers to 7.4 million by 2030 and generate NZ$3.4 billion in annual revenue from them. Beyond this, it feels the company has a huge opportunity from monetising its app ecosystem.

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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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 extraordinary ASX shares to buy in 2021 appeared first on The Motley Fool Australia.

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