1 ASX growth stock down 40% to buy right now

Goldman Sachs thinks this beaten down stock could be great value.

| More on:
Happy man working on his laptop.

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

sdf

IDP Education Ltd (ASX: IEL) shares have been sold off over the last 12 months.

Concerns over the loss of its language testing monopoly in Canada and student visa changes have led to its shares losing almost 40% of their value.

This leaves the ASX growth stock trading within a whisker of its 52-week low of $18.29.

Is this ASX growth stock a buy?

While this decline is disappointing, the team at Goldman Sachs believes that investors should be chomping at the bit to snap up its shares while they're down.

In response to the company's recent half-year results release, the broker has retained its buy rating with a $26.60 price target.

Based on the current IDP Education share price of $18.55, this implies potential upside of 43% for investors over the next 12 months.

In addition, Goldman expects a 46 cents per share dividend in FY 2024. This represents a modest but attractive 2.5% dividend yield, boosting the total potential return beyond 45%.

What did the broker say about IDP Education?

The broker believes that the ASX growth stock is going to be a stronger business when the dust settles on recent industry events.

It then expects IDP Education to go through a period of very strong earnings growth. It explains:

IEL is likely to emerge through this period of short-term regulatory tightening with a more diversified business and stronger SP market position to capitalise on the long-term structural growth in international education, setting up the company for multi-year mid-teens earnings growth. On that basis, the shares represent attractive value, and we reiterate Buy.

All in all, the broker appears to believe it could be a great option for investors that are willing to be patient.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Growth Shares

3 ASX 200 growth shares with room to run in FY26

Let's see why analysts think these shares are top picks for growth investors in the new financial year.

Read more »

Group of children dressed in green hold up a globe relating to climate change.
Growth Shares

3 ASX 200 shares quietly riding major global trends

Analysts think these buy-rated shares are destined to have bright futures.

Read more »

Three excited business people cheer around a laptop in the office
Growth Shares

These amazing ASX shares could be compounding machines

Let's see why these quality shares could be key to generating big returns over the next decade.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Growth Shares

Where to invest $5,000 in ASX shares for growth

These shares could be top picks for investors looking for growth opportunities.

Read more »

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

I think these 2 exciting ASX growth shares are buys today

These compelling investments have a great outlook.

Read more »

Happy man working on his laptop.
Growth Shares

EOFY 2025: 3 ASX 200 shares to buy for the year ahead

Looking for quality picks for the next financial year? Here are three quality picks that analysts rate as buys.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Growth Shares

Macquarie tips nearly 50% upside for this ASX 200 stock

Let's see which stock the broker is feeling bullish about this week.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Growth Shares

3 excellent ASX 200 growth shares brokers rate as buys

Let's see why they think investors should be snapping them up right now.

Read more »