Investors looking for ASX growth shares to buy might want to look at the two listed below.
These shares have been named as buys and tipped to climb meaningfully from current levels by analysts at Goldman Sachs. Here's what you need to know:
Macquarie Technology Group Ltd (ASX: MAQ)
The first ASX growth share that Goldman Sachs is bullish on is Macquarie Technology. It is a leading data centre, cloud, cyber security, and telecom company for mid to large business and government customers.
Goldman Sachs believes Macquarie Technology is well-placed for growth and undervalued by the market. It said:
We believe that MAQ is undervalued on a SOTP basis, with high-quality underlying businesses across the IT stack from data centre infrastructure to managed services and cybersecurity. We are positive on management's strategy and long history of successful execution, and believe MAQ is on track to building an enduring vertically-integrated cloud franchise.
Goldman has a conviction buy rating and a $77.20 price target on the company's shares.
TechnologyOne Ltd (ASX: TNE)
Another ASX growth share that Goldman Sachs thinks is a buy is enterprise software provider TechnologyOne.
The broker likes TechnologyOne due to its successful transition to a software-as-a-service focused business and its defensive earnings. It expects this to underpin strong annual recurring revenue and earnings growth through to at least FY 2025. The broker explains:
We highlight the defensiveness of TNE's core end markets of Local Government (35% of 1H23 ARR) and Education (25%), and the public sector more broadly (>75%), with growing IT spending supported by revenue streams including council rates and government funding. We see TNE's +10-15% FY23E PBT growth guidance as conservative, and believe that TNE can grow PBT >15% p.a. across FY23-25E driven by its strong ARR outlook (+18% FY22-25E CAGR) and modest margin expansion (+220bps FY22-25E).
Goldman Sachs has a buy rating and a $18.30 price target on Technology One's shares.
