Growth investors have a lot of options on the Australian share market.
To narrow things down for you, let's take a look at two ASX 200 growth shares that Goldman Sachs is currently recommending to clients.
Here's what the broker is saying about these growth shares:
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Web Travel Group Ltd (ASX: WEB)
The team at Goldman Sachs think that Web Travel Group could be an ASX 200 growth share to buy this month. It is the business to business travel company behind the WebBeds business.
Goldman thinks that investors should be taking advantage of recent share price weakness to pick up its shares. Particularly given that they now trade on undemanding multiples. It explains:
WEB is the second largest Hotel Bed wholesaler globally with <10% of the global hotel wholesale market. We are Buy rated on WEB as we have confidence that WEB will be able to grow TTV in line with its FY25/30 targets of A$5bn/A$10bn respectively. In particular, we believe WEB is well placed to continue to grow in key US/APAC growth markets, though expect revenue margin to lower towards ~6.3% over time as the company expands into lower margin US/APAC markets. WEB is trading below fair value, on our estimates.
Goldman currently has a buy rating and $6.70 price target on its shares.
Xero Ltd (ASX: XRO)
Another ASX 200 growth share that Goldman Sachs is feeling very bullish about is Xero.
It is a leading cloud accounting provider with several million subscribers on its platform.
While this sounds like a large number, it is barely even scratching at the surface of its significant long term total addressable market (TAM). Goldman estimates this to be over 100 million subscribers across the globe.
Clearly Xero has a significant growth runway over the next couple of decades, which bodes well for its earnings growth. The broker recently said:
Xero is a Global Cloud Accounting SaaS player, with existing focuses in ANZ, UK, North American and SE Asian markets. We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company's pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated. Key catalysts include: High frequency data (downloads/visitation/pricing); CEO North America strategy update and results, and potential M&A.
Goldman currently has a conviction buy rating and $201.00 price target on its shares.
