Brokers name 2 ASX growth shares to buy now

If you’re searching for growth shares to buy, then two ASX shares listed below could be worth considering.

Both have been named as buys by brokers and tipped to have major upside potential. Here’s what they are saying about them:

Readytech Holdings Ltd (ASX: RDY)

The first ASX growth share to look at is enterprise software provider Readytech.

Earlier this month, Readytech released its full year results and revealed a 16.8% year over year increase in revenue to $78.3 million and a 45.5% jump in underlying EBITDA to $27.5 million.

Goldman Sachs was pleased with this in-line result and notes that its “strong organic growth execution builds confidence in medium-term earnings outlook.”

In response to the result, the broker reiterated its buy rating with a trimmed price target of $4.30. Goldman commented:

We are constructive on RDY’s growth outlook given its defensive end-market exposures (government and education represent ~3/4 of FY23E revenue) and see scope for margins to grow from FY23 onwards, aided by transitioning IT Vision’s on-premise customer base to cloud in coming years (generating a 2-3x ARPU uplift).

RDY remains materially undervalued relative to profitable SaaS peers (we estimate >50% discount on growth-adjusted FY24E EV/EBITDA) and is building an impressive track record of organic growth execution which in our view will drive a re-rating over time.

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX growth share that could be a top option for investors is Treasury Wine. It is one of the world’s leading wine companies with a portfolio of popular brands including Penfolds, 19 Crimes, and Wolf Blass.

It also recently released its full year results and revealed solid growth across the business. This went down well with analysts at Morgans, which are expecting this strong form to continue in the future.

In response to its result, the broker retained its add rating and lifted its price target to $15.71. The broker commented:

Despite all the external headwinds, TWE’s FY22 result was solid and in line with our forecast and its guidance. Importantly, the 2H demonstrated strong EBITS and NPAT growth (+14.1% and +18.8% on pcp). Despite cost pressures, the foundations are now in place for TWE to deliver strong double digit growth from FY23.

Pleasingly, the benefits of its new divisional model are clearly evident and the Penfolds reallocation strategy has been a success. Trading at a material discount to our valuation and its pre-COVID multiples, we maintain an Add rating with a new price target of $15.71 on this high quality company.

The post Brokers name 2 ASX growth shares to buy now appeared first on The Motley Fool Australia.

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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. has positions in and has recommended Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd and Treasury Wine Estates Limited. 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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