Zip Co Ltd (ASX:Z1P) and this ASX growth share could be in the buy zone right now. Here’s why these growth shares are highly rated…
The post Why Zip (ASX:Z1P) and this growth share are in the buy zone today appeared first on The Motley Fool Australia. –
Are you a growth investor? If you are, then you’re in luck. This is because the ASX is home to a number of companies growing strongly.
Two top ASX growth shares that have been tipped as buys are listed below. Here’s why they are highly rated:
Kogan.com Ltd (ASX: KGN)
Kogan is a leading ecommerce company that has been growing at an explosive rate.
For example, during the first half of FY 2021 Kogan delivered a 97.4% increase in gross sales to $638.2 million and a 250.2% jump in adjusted net profit after tax to $36.5 million.
Key drivers of this stellar growth were the accelerating shift to online shopping, the expansion of its product offering, acquisitions, and a big jump in customer numbers. In respect to the latter, the company reported a 76.8% increase in Kogan active customers to 3 million. It also has ~0.72 million Mighty Ape customers as well.
One broker that appears confident that the company has a long runway for growth is Credit Suisse. Earlier this month the broker put an outperform rating and $20.85 price target on its shares. This compares very favourably to the current Kogan share price of $13.33.
Zip is a leading buy now pay later (BNPL) provider which has also been growing at an explosive rate.
This has been driven by its international expansion, the acquisition of QuadPay, the decline in credit card usage, and the growing growing popularity of the BNPL payment method with both consumers and merchants.
During the first half of FY 2021, Zip reported a massive 141% increase in total transaction volume (TTV) to $2.32 billion and a 130% jump in revenue to $160 million. And while the company posted a sizeable loss, it has the balance sheet capacity to accommodate this.
Zip’s impressive first half sales growth was underpinned by another material increase in active customers. At the end of December, there were 5.7 million active customers on its platform globally. This was up 217% over the prior corresponding period.
One broker that was particularly impressed was Morgans. In response to its results, the broker retained its add rating and lifted its price target to $12.10. This compares to the latest Zip share price of $8.07.
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.
*Returns as of February 15th 2021
- Afterpay and Zip were among the most traded ASX shares last week
- ASX 200 crash anniversary: 5 of the best performing shares of the last 12 months
- 5 things to watch on the ASX 200 on Tuesday
- ASX 200 Weekly Wrap: Inflation fears hold ASX down
- 2 ASX growth shares that could be strong buys
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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.