2 fantastic ASX shares with long runways for growth

When looking for growth shares to buy, I like to focus on companies that have long runways for growth. This is because they have the potential to generate strong long term returns for investors, allowing them to benefit from the power of compounding.

Two ASX growth shares which have been tipped for big things in the future are listed below. Here’s why they are highly rated:

Afterpay Ltd (ASX: APT)

The first ASX growth share to look at is Afterpay. It is a payments company that has grown at an explosive rate over the last few years thanks to the growing popularity of the buy now pay later payment method globally.

Positively, Afterpay is planning to increase its product portfolio very shortly with the launch of transaction accounts through the Afterpay Money app. After which, analysts at Bell Potter don’t expect the company to stop there. They believe that Afterpay could expand into other products such as mortgages in the future.

In addition to this, last week the company’s European acquisition completed. This means that it can now start its expansion onto mainland Europe. If this and its probable expansion into Asia are a success, this could provide it with a very long runway for growth over the next decade.

It’s no wonder then that Bell Potter is so positive on the company and its growth prospects. According to a recent note, the broker has a buy rating and $168.50 price target on Afterpay’s shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay provides the faith sector with a donor management system, including donor tools, finance tools and a custom community app, and a church management system (ChMS).

Its increasingly popular solutions simplify engagement, payments and administration, enabling users to increase participation and build stronger relationships with their communities.

Last year the company acquired Church Community Builder. It provides a platform that churches use to connect and communicate with their community members, record member service history, track online giving and perform a range of administrative functions.

Since then, the company has developed and launched its all-in-one engagement solution, ChurchStaq. ChurchStaq combines Pushpay’s giving and engagement solution with Church Community Builder’s ChMS functionality. It notes that this results in a holistic software solution that equips customers of all sizes with the technology they need to seamlessly connect across different ministry touch points.

This appears to have put Pushpay in a strong position to dominate its market and deliver on its goal of growing its US market share to 50%, which is worth US$1 billion in revenue per annum at present. This will be a significant lift on FY 2020’s revenue of US$129.8 million.

Analysts at Goldman Sachs are positive on the company. They have a conviction buy rating and $2.59 price target on its shares.

More reading

• Afterpay (ASX:APT) and another ASX growth share to buy right now
• ASX 200 up 0.95%: Afterpay rises, Westpac’s APRA update, Qantas upgraded
• Why Afterpay, Piedmont Lithium, ResApp, & Santos are charging higher
• 5 things to watch on the ASX 200 on Friday
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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