If you’re on the lookout for growth shares to add to your portfolio, then you may want to look at the two listed below.
Here’s why these ASX shares could be good additions right now:
REA Group Limited (ASX: REA)
The first ASX growth share to look at is REA Group. It is the dominant player in real estate listings in the Australian market with its realestate.com.au website.
REA Group has been (successfully) battling difficult trading conditions over recent years caused by a housing market downturn and COVID-19. However, those tough trading conditions have now eased and the housing market is booming.
This is expected to lead to a significant increase in listings over the coming years. Which, combined with cost cutting, price increases, and new revenue streams, could support solid earnings growth.
Macquarie is a fan of REA Group. Its analysts currently have an outperform rating and $171.70 price target on its shares.
Xero Limited (ASX: XRO)
Another ASX growth share to look at is this leading cloud-based business and accounting software platform provider.
Due to the quality and stickiness of its platform and its international expansion, Xero has been growing both its customer numbers and subscription revenues at a very strong rate over the last few years.
Positively, this has continued in FY 2021 despite many small businesses struggling during the pandemic.
For example, during the first half of FY 2021, Xero’s subscriber numbers increased to 2.45 million, underpinning a 21% increase in operating revenue to NZ$409.8 million.
The good news is that while these are large numbers, they are still only a small portion of its addressable market. Analysts at Goldman Sachs believe Xero can triple its subscriptions to 7.4 million by 2030.
Furthermore, if Xero can successfully broaden and monetise its app ecosystem and expand into new geographies, Goldman believes it would open a further NZ$62 billion in total addressable market (TAM). This is on top of its core TAM of NZ$14 billion across key markets.
The broker currently has a buy rating and $153.00 price target on its shares.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
More reading
- 2 excellent ASX 200 blue chip shares to buy
- How $20,000 turns into $250,000 in 10 years with ASX shares
- 2 of the best ASX 200 shares according to analysts
- Broker tips REA Group (ASX:REA) share price to shoot higher from here
- 2 five-star ASX 200 shares that are rated very highly
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 Xero. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post 2 outstanding ASX growth shares rated as buys appeared first on The Motley Fool Australia.
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