If you’re a fan of tech shares, then you may want to look closely at the two listed below.
Both shares are rated highly by the team at Goldman Sachs. Here’s what the broker thinks about them:
Hipages Group Holdings Ltd (ASX: HPG)
The first ASX tech share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with over 30,000 trusted tradies.
Goldman Sachs is very bullish on Hipages’ growth prospects. As a result, it currently has a buy rating and $4.95 price target on its shares.
The broker commented: “In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. There is a meaningful growth runway for HPG from here: it currently captures only 2.4% of industry GMV; of the GMV it does service, the take rate is low compared to other vertical marketplaces. We forecast 22% revenue CAGR from FY21-FY24E and despite near term reinvestment generating a flat margin profile over our forecast period, we expect solid operating leverage over the long term with our terminal year (FY31E) EBITDA margin reaching 46%.”
PointsBet Holdings Ltd (ASX: PBH)
Another ASX tech share to look at is PointsBet. It is a sports betting and iGaming provider with operations in the ANZ and US markets. At the end of FY 2021, the company had grown its active clients to 196,585 in Australia and 159,321 in the US.
Goldman Sachs is also very positive on PointsBet’s outlook. This is due largely to its massive opportunity in the US market. The broker has a buy rating and $14.75 price target on its shares.
It commented: “Overall we remain positive on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, which we forecast to be a >US$50 bn TAM opportunity at maturity, ii) our view that PBH remains well-placed to capitalise given its in-house tech stack, iii) upside risk to long-run sustainable margins in Aus and the US, and iv) scalability benefits ahead from NBCUniversal leads and broader coverage from state roll outs.”
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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. owns shares of and has recommended Hipages Group Holdings Ltd. and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Hipages Group Holdings Ltd. and Pointsbet Holdings Ltd. 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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