Buy Xero and this ASX 200 growth share in February

Analysts have good things to say about these growing companies.

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Are you a fan of ASX 200 growth shares? If you are, then it could be worth taking a closer look at the two in this article.

They have both recently been named as buys by analysts and tipped to deliver double-digit returns for investors over the next 12 months.

Here's what analysts are saying about them and how high they think their shares could climb:

Light & Wonder Inc. (ASX: LNW)

The team at Bell Potter thinks that Light & Wonder could be an ASX 200 growth share to buy this month. It is gaming technology company with a collection of popular poker machines and iGaming products.

A recent note reveals that its analysts believe that its shares are good value at current levels. This is based on its positive growth outlook and following a pullback related to Dragon Train litigation. The broker said:

We anticipate 8-11% annual EBITDA growth rates over CY24-26, driven by further R&D investment that enhances game performance and results in market share gains across the North American premium leased market, global outright game sales markets, and online gaming markets. Additionally, we view the recent turmoil surrounding the Dragon Train preliminary injunction as an attractive entry point.

Bell Potter currently has a buy rating and $180.00 price target on its shares. Based on its current share price of $139.89, this suggests that its shares could rise by approximately 29% over the next 12 months.

Xero Limited (ASX: XRO)

Over at Goldman Sachs, its analysts think that Xero could be an ASX 200 growth share to buy this month. It is a cloud accounting platform provider with 4.2 million subscribers across the globe.

The broker is positive on the company due to the quality of its platform and its huge total addressable market (TAM), which is estimated to be over 100 million small to medium sized businesses. In addition, Goldman highlights that Xero's outlook is positive for the year ahead. It said:

We are positive on the CY25 outlook as given that accelerating product cadence is supporting subscriber and ARPU growth in ANZ and abroad. However, we expect a step-up in US investment this year, presenting risk to consensus margins – but are increasingly positive on this opportunity.

Goldman Sachs currently has a buy rating and $201.00 price target on the company's shares. Based on its current share price of $182.07, this implies potential upside of 15% for investors.

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Light & Wonder, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Light & Wonder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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