If you're a growth investor then you're in luck. The Australian share market is home to a number of quality shares that have the potential to grow strongly in the future.
Two top ASX growth shares that have been tipped as buys are listed below. Here's why they are highly rated:
IDP Education Ltd (ASX: IEL)
The first ASX growth share to look at is IDP Education. It is a leading provider of international student placement and English language testing services.
IDP Education has been impacted greatly by a significant reduction in demand for its services because of the pandemic. This led to the company reporting a 29% decline in revenue to $269 million and a 46% decline in EBIT to $47.3 million during the first half.
While this is disappointing on paper, it is worth noting that trading conditions improved greatly as the half progressed. So much so, in December, testing volumes were broadly in line with those experienced in the final month of 2019 prior to the pandemic.
This bodes well for the second half, particularly given the roll out of vaccines across the world. Furthermore, due to the company's strong financial position, it is well-placed to win a greater share of the market when the pandemic passes.
Morgan Stanley is a fan of the company. Last month it put an overweight rating and $30.00 price target on the company's shares. The broker is expecting its earnings to bounce back strongly in FY 2022.
Zip Co Ltd (ASX: Z1P)
Another ASX growth share to consider buying is Zip. This leading buy now pay later (BNPL) provider has been growing at a rapid rate over the last few years.
This has been driven by the ever-increasing popularity of the BNPL payment method with consumers and merchants, the decline in credit card use, and its international expansion. The latter was underpinned by the incredibly successful acquisition of Quadpay in the United States.
While the ANZ business is still growing strongly, Quadpay is the real growth engine right now. And thanks to its massive opportunity in the United States, it looks well-placed to continue driving its growth for a long time to come. So much so, there have been suggestions that Zip should change its name to Quadpay now.
One broker that is positive on the company is Citi. In response to its stellar third quarter update this week, the broker upgraded its shares to a buy rating with an $11.30 price target.
