The tech sector is home to a number of companies growing at a quick rate.
Three that have been standout performers recently are listed below. Here's why they could be in the buy zone:
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Adore Beauty Group Limited (ASX: ABY)
The first tech share to consider is Australia's leading online beauty retailer – Adore Beauty. It has been growing at a strong rate in recent years thanks to the strength of its brand and the shift online. Pleasingly, after delivering a 48% increase in revenue to $179.3 million in FY 2021, the company has started the new financial year in a positive fashion. Earlier this month, Adore Beauty reported first quarter revenue of $63.8 million, up 25% on the prior corresponding period. Even if you annualise this, it is still only a fraction of the Australian beauty and personal care (BPC) market, which is estimated to be worth $11.2 billion. This gives it a long runway for growth over the next decade.
UBS is a fan of the company. It recently reaffirmed its buy rating and $6.00 price target.
NEXTDC Ltd (ASX: NXT)
Another tech share to look at is NEXTDC. It is one of the Asia-Pacific region's leading data centre operators. NEXTDC has been growing at a consistently strong rate for years thanks to the structural shift to the cloud. This has led to increasing demand for capacity in its growing network of world class data centres across Australia. FY 2022 will be no exception, with management guiding to full year EBITDA growth of 19% to 22%.
Citi currently has a buy rating and $15.40 price target on the company's shares.
Xero Limited (ASX: XRO)
A final ASX tech share to consider is Xero. As with the others, this leading provider of a cloud-based business and accounting solution to small and medium sized businesses has been growing at a strong rate in recent years. Gone are the days of spreadsheets and notebooks, accounting is moving rapidly to the cloud and Xero is reaping the rewards thanks to its high quality platform. In addition to its core offering, Xero has an app store offering countless third party apps that make running a business easier. Xero clips the ticket on purchases through the app store, much like Apple does with its own store for iOS devices.
Goldman Sachs believes the app store could be a key driver of growth in the future, along with its ongoing global expansion. In light of this, it is very bullish and has a buy rating and $165.00 price target on its shares.
