It hasn’t been a great start to the year for growth shares. A number of high flying shares have had their wings singed like Icarus in 2022.

But while that is disappointing, it could also be a buying opportunity for investors. Here’s what analysts are saying about these growth shares:

Life360 Inc (ASX: 360)

The first ASX share to look at is Life360. It is a location-based services provider based in San Francisco, United States with 33 million+ monthly active users. Its shares have lost approximately half of their value since the start of the year.

The team at Bell Potter believe this is a buying opportunity and remain very positive on its long term outlook. So much so, the broker has a buy rating and $10.00 price target on its shares. This is just over double where its shares trade at today.

Bell Potter commented: “Life360 had already pre released most of the key metrics in the 2021 result which were all very strong. These included subscription revenue growth of 48%, total revenue growth of 40%, paying circles growth of 38% and, by our estimation, average revenue per paying circle (ARPPC) growth of 20%. The company ended the year with a cash c.US$94m after adjusting for the Tile acquisition and the only debt is convertible notes of c.US$8m.”

“We have updated each valuation used in the determination of our price target for the forecast changes as well as market movements and time creep. We have also removed the premium in EV/Revenue valuation and increased the WACC in the DCF from 8.4% to 8.7% due to the uncertainty around any impact on Tile and also the potential US listing and any associated raising. The net result is a 26% decrease in our PT to $10.00 which is still a large premium to the share price so we keep the BUY.”

Nitro Software Ltd (ASX: NTO)

Another ASX share to look at is Nitro Software. It is a software company that is aiming to drive digital transformation in organisations around the world. Its key solution is the Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools to customers.

Goldman Sachs is very positive on the company and notes that it has a huge total addressable market to grow into in the future. The broker currently has a buy rating and $2.60 price target on its shares. This is almost double the latest Nitro share price of $1.36.

Its analysts commented: “Nitro Software is a global enterprise software challenger in a US$34bn TAM across PDF, e-signing and workflows. Nitro operates in large, underpenetrated markets supported by structural growth tailwinds including remote work, enterprise digitisation and e-signing adoption.”

“We estimate Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9x uplift to Nitro’s current revenue base. In our view, this is achievable given (1) Nitro’s core competitive advantages in price, ease-of-use and customer service; (2) strong underlying market growth; and (3) large market opportunity supporting Nitro’s growth in addition to established incumbents.”

The post Analysts see almost 100% upside for these ASX shares appeared first on The Motley Fool Australia.

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• Why is the Life360 (ASX:360) share price jumping 17% today?

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. The Motley Fool Australia has recommended Nitro Software Limited. 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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Are you looking for some exchange traded funds (ETFs) to add to your portfolio this month? If you are, it could be worth taking a closer look at the three ETFs listed below.

Here’s what you need to know about these ETFs right now:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF to look at is the BetaShares Global Energy Companies ETF. This ETF provides investors with easy access to energy companies that are larger, more geographically diversified, and more vertically integrated than Australian-listed energy companies. Among its holdings are energy giants including BP, Chevron, ExxonMobil, and Royal Dutch Shell. These companies look well-placed to benefit from sky high energy prices.

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

Another ETF for investors to look at is the ETFS Battery Tech & Lithium ETF. Especially after it tumbled to a 52-week low on Friday. This ETF offers investors with exposure to providers of electrochemical storage technology and battery materials/lithium miners. Given how demand for battery materials is rising fast and outpacing supply, the companies included in the fund appear well-placed for growth. Among its holdings you’ll find AMG Advanced Metallurgical Group, Lockheed Martin, and Pilbara Minerals Ltd (ASX: PLS).

VanEck Vectors Australian Banks ETF (ASX: MVB)

A final ETF for investors to look at is the VanEck Vectors Australian Banks ETF. It could be a good option for investors that are wanting exposure to the banking sector but aren’t sure which of the banks to buy. This is because this ETF allows you to own a slice of all the big four banks, the regionals, and also investment bank Macquarie Group Ltd (ASX: MQG) through a single investment. Another positive with this ETF is that it offers an attractive yield. Its 12-month distribution yield currently stands at 5.2%.

The post Here are 3 top ETFs for ASX investors to watch appeared first on The Motley Fool Australia.

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• 3 ASX ETFs hitting 52-week lows on Friday
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• Why has the ETFS Battery Tech & Lithium ETF (ASX:ACDC) been on a highway to hell the past month?

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 and has recommended BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Brickworks Limited (ASX: BKW) share price has lots of potential to grow according to the broker Ord Minnett.

Brickworks is one of the older businesses on the ASX. It has operated as one of Australia’s biggest brick manufacturers for decades, and now it is a diverse business.

There are three segments to the business. It has its building products division, ‘investments’ and an industrial property trust.

Building products

Brickworks has operations in both Australia and the US.

In Australia, it is the leading brickmaker with a number of brands such as Austral Bricks. It also makes several other building products including masonry, paving, roofing, precast and so on.

The ASX share did a few acquisitions in the US. It is now the largest brickmaker in the north east of the US. Brickworks has been working on making that segment more efficient to increase profit margins.

Investments

Brickworks has had a cross-holding arrangement with the investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) for decades. It helped stop corporate raiders.

For decades, Soul Pattinson has helped provide stability and reliable earnings to help offset the cyclicality of the building products division. The growing Soul Pattinson share price has helped the underlying value of the Brickworks share price.

The investment conglomerate has a diverse portfolio with many different businesses including TPG Telecom Ltd (ASX: TPG), Brickworks, New Hope Corporation Limited (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), agriculture and swimming schools.

Industrial property trust

Ord Minnett recognises that the joint venture with Goodman Group (ASX: GMG) is adding a lot of value for the Brickworks share price.

This trust is where Brickworks sells excess land into the trust for the joint venture to then build high-quality industrial properties on that land. There are some massive buildings going up for both Amazon and Coles Group Ltd (ASX: COL). Another sizeable warehouse is also being built for Woolworths Group Ltd (ASX: WOW).

The Amazon building was due for practical completion at the end of December. This, together with other projects at Oakdale South, will result in significant development profits.

Brickworks says the trust is seeing strong demand and sustained growth in the value of its property trust. COVID-19 has accelerated industry trends towards online shopping and increased the importance of well-located distribution hubs and sophisticated supply chain solutions.

Thanks to the demand, it’s expecting to report record property earnings in the first half of FY22 with property earnings before interest and tax (EBIT) expected to be between $290 million to $310 million.

Brickworks recently released 75 hectares of land at Oakdale East which will extend the development pipeline in the trust.

Brickworks share price target

Ord Minnett has a price target of $26.20 on the business, suggesting a potential upside of more than 20%.

The post Here’s why the Brickworks (ASX:BKW) share price has loads of growth potential: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. 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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Unfortunately, it was another week to forget for the Zip Co Ltd (ASX: Z1P) share price and shareholders.

Last week the buy now pay later (BNPL) provider’s shares were the worst performers on the ASX 200 index with a 22.2% decline.

This means the Zip share price is now down 60% since the start of the year and 82% over the last 12 months. It also reduces the Zip market capitalisation down to approximately $1.15 billion.

What happened to the Zip share price?

Investors were selling down the Zip share price last week following the completion of a ~$150 million institutional placement and in response to its plan to acquire BNPL rival Sezzle Inc (ASX: SZL).

In respect to the former, Zip raised the funds at a sizeable 14% discount of $1.90 per new share. Though, even at that level of discount, institutional investors are still under water, with the Zip share price ending the week at $1.72.

As for the latter, the market didn’t react too positively to the proposed all-scrip acquisition of Sezzle Inc (ASX: SZL).

For example, in response to the news, the team at UBS downgraded the company’s shares to a sell rating and cut the price target on them by a massive 80% to a lowly $1.00.

Were the Zip share price to fall to $1.00, it would be the lowest level it has traded at since 2018.

Elsewhere, Macquarie believes Zip might have overpaid for Sezzle and Citi suggested some of the synergy targets could be a little too optimistic.

Glimmer of hope

It is worth pointing out that not everyone is bearish on the acquisition or the Zip share price.

Analysts at Morgans believe the deal makes strategic sense. And while the broker has slashed its price target down to $3.94, this is still more double where its shares currently trade.

Morgans commented: “Clearly, the Sezzle deal makes strategic sense for Z1P. The deal increases both Z1P’s global transaction levels (currently A$7.9bn) and customer base (currently 9.9m) by around ~30-35% respectively. It gives Z1P a materially stronger position in the key US market, with Z1P/Sezzle customer overlap being relatively contained (25%). A stronger product mix and enhance distribution channel mix are other benefits.”

“Clearly the global environment has changed for BNPL operators and for investors it’s now not a space for the faint hearted. We do, however, think the global growth opportunity remains large for companies that can execute in the BNPL space. The scale provided by the acquisition of Sezzle and a more considered growth agenda, could see Z1P be one of those winners, and with Z1P now trading on 2x revenue, we maintain our ADD recommendation,” it concludes.

Time will tell which analysts make the right call.

The post What on earth happened to the Zip (ASX:Z1P) share price last week?! appeared first on The Motley Fool Australia.

More reading

• 5 ASX shares making big news this week
• These were the worst performing ASX 200 shares last week
• Why did the Block (ASX:SQ2) share price sink 9% today?
• Why Magellan, Nick Scali, Qantas, and Zip shares are tumbling today
• 5 ASX 200 shares slumping to 52-week lows on Friday

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 and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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