2 highly rated ASX growth shares

These companies are growing at a very quick rate…

| More on:
Graphic showing yellow arrow above vertical columns indicating a rising share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new month is here, so what better time to look for new additions to your portfolio.

If you have room for a growth share or two, you might want to consider the shares listed below. Here's what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. This appliance manufacturer has been growing at a solid rate in recent years thanks to its international expansion and favourable industry tailwinds.

In respect to the latter, COVID-19 has led to more cooking and working at home, which has underpinned an increase in demand for whitegoods such as cooking equipment and coffee machines.

Demand was so strong that Breville reported stellar sales and profit growth during the first half of FY 2021. The company posted a 28.8% increase in revenue to $711 million and a 29.2% increase in net profit after tax to $64.2 million.

Looking ahead, management is confident its strong performance will continue in the second half. It is guiding to earnings before interest and tax of $136 million. This is up from its previous guidance of $128 million to $132 million and will be a 20% increase year on year.

UBS is positive on its long term growth thanks to its strong market position, new product launches, and its expansion into new markets. The broker has a buy rating and $35.70 price target on its shares.

NEXTDC Ltd (ASX: NXT)

Another ASX growth share to look at is NEXTDC. It has nine world class data centres across Australia and a rich partner ecosystem that comprises over 660 clouds, networks, and ICT specialty services. It is also currently looking to expand its offering into both Singapore and Tokyo, which offer huge market opportunities.

In the meantime, though, NEXTDC is generating significant revenue and earnings in the Australian market. For example, during the first half of FY 2021, the company reported a 27% increase in data centre services revenue to a record $121.6 million and a 29% increase in EBITDA to $65.7 million. This was underpinned by a 33% lift in contracted utilisation to 71MW, a 16% lift in customers, and a 16% rise in interconnections.

Positively, more of the same is expected in the second half. This is being driven by the ongoing shift to the cloud, which has led to very strong demand for capacity in its centres. So much so, a good portion of its planned capacity additions have already been contracted.

UBS is also a fan of NEXTDC. Its analysts currently have a buy rating and $15.40 price target on its shares.

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Growth Shares

A couple stares at the tv in shock, one holding the remote up ready to press.
Growth Shares

3 high-conviction ASX 200 stocks to buy and hold

Brokers think these shares are among the best to buy now.

Read more »

Person holding Australian dollar notes, symbolising dividends.
Growth Shares

The smartest ASX growth stocks to buy with $3,000 right now

Analysts think these shares would be top picks for smart investors.

Read more »

A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP
Growth Shares

2 Australian stocks that could turn $10,000 into $100,000

Let's see why these shares could be destined for bright long-term futures.

Read more »

A happy young woman in a red t-shirt hold up two delicious burritos.
Growth Shares

2 ASX 200 shares that could be top buys for growth

I’m bullish about these shares. Here’s why.

Read more »

Red buy button on an apple keyboard with a finger on it representing asx tech shares to buy today
Share Market News

The smartest growth stock to buy with $5,000 right now

This growth stock has the potential to keep on keeping on. 

Read more »

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Growth Shares

2 explosive ASX shares that could go parabolic

These shares could be destined for big things in the future.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Growth Shares

3 exciting ASX 200 growth shares to buy in July

Brokers think these shares could be top picks for growth investors.

Read more »

A woman sits on sofa pondering a question.
Growth Shares

Is this the best ASX 200 share to buy for growth?

This stock is exposed to multiple growth tailwinds.

Read more »