Looking for a growth share or maybe two to buy? If you are, you may want to look at the two listed below.
Here's why these ASX growth shares are rated highly right now:
Image source: Getty Images
Temple & Webster Group Ltd (ASX: TPW)
The first ASX growth share that analysts are bullish on is Temple & Webster.
It is Australia's leading online retailer of furniture and homewares. It operates largely through a drop-shipping model, which is complemented by a private label range sourced directly by management.
While a weaker than expected trading update with its half-year results spooked the market last month, Goldman Sachs believes the selloff that ensued has created a buying opportunity. Particularly given its belief that the soft update reflects "the lapping of omicron rather than a deterioration in underlying trends."
In light of this, the broker has put a buy rating and $6.50 price target on the company's shares. It adds:
The long term structural growth opportunity is unchanged: we forecast a 21% 10-yr EBITDA CAGR driven by consolidation of market share and growing online penetration.
Xero Limited (ASX: XRO)
Another ASX growth that has been named as a buy is Xero. Xero is a global small business platform which provides its 3.3 million global subscribers with a core accounting solution, as well as payroll, workforce management, expenses and projects solutions.
In addition, Xero provides access to financial services, an ecosystem of more than 1,000 connected apps, and more than 300 connections to banks and other financial institutions.
Citi is a fan of the company and is forecasting very strong growth over the coming years. And while the current operating environment is not ideal, the broker believes that things are actually better than expected. It commented:
Our analysis of company insolvency and formation data points to normalising trends, with insolvency increasing and new business formation slowing in the Dec quarter across most markets except for the UK. However, except for NZ, the increase in insolvencies in 2H23e to date is tracking below our 2H23e churn assumptions. Website visits and app downloads are slowing across most markets; however, we see this as less correlated with subscriber growth but do note that add-on app downloads (Xero Me, Planday) are seeing good growth, which is positive for ARPU.
Citi has a buy rating and $92.40 price target on the company's shares.
