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Making a passive income has been made more difficult over recent months. An uncertain global economic outlook and low interest rates mean that there are potentially fewer options available to income-seeking investors. After all, some companies have cut their dividends, while other assets such as bonds and cash now have extremely low returns.

Despite this, it is possible to obtain a generous level of income from an investment in dividend shares. As such, now could be the right time to invest $20k, or any other amount, to obtain a growing income that is likely to be significantly higher than that available elsewhere.

A generous passive income

While the stock market has experienced a rally over recent months, a number of dividend shares continue to offer high yields. As such, it is possible to build a diverse portfolio of stocks that offers a high combined passive income for 2021.

On a relative basis, the income produced by shares this year is likely to be much higher than that available elsewhere. For example, other mainstream assets such as property have risen in price over the last decade. This may mean that yields across the sector have been squeezed at the same time as some stocks trade at low prices with high dividend yields.

Similarly, low interest rates mean that the income return on bonds and cash may be less than inflation in 2021 and in the coming years. This could further increase the appeal of dividend shares as a means to obtain a worthwhile passive income.

Dividend growth potential

As well as a generous income return in 2021, an investment in dividend shares could provide a growing passive income over the coming years. Certainly, a number of income stocks will fail to raise their dividends this year because of disruption caused by coronavirus and a weaker global economic performance. They may decide to hold cash in case there are further economic challenges or disruption caused by coronavirus ahead. However, history shows that this situation is unlikely to persist in the long run, and that an economic recovery is likely to take place.

This could allow dividend shares to raise their payouts at a fast pace that may be above inflation in many instances. This could further raise the profile of dividend stocks so they become popular among a broader range of investors. For example, a rapidly-rising dividend may suggest to growth investors that a company’s management team is optimistic about its prospects. This could increase demand for that company’s shares, and lead its stock price higher.

Therefore, dividend shares could offer capital growth alongside a worthwhile passive income today. This means that they could be worth buying instead of other assets to provide an income return on a $20k investment, or any other amount, over the coming years.

More reading

• Spotlight on the Beacon (ASX:BLX) share price after a shining result
• Sonic (ASX:SHL) share price in the spotlight as it posts a 166% profit surge
• Why the Santos (ASX:STO) share price is on the radar today
• Leading broker tips Domino’s (ASX:DMP) share price to go even higher
• Facebook bans Aussies from sharing, viewing news

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. 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 Sonic Healthcare Limited (ASX: SHL) could be poised to outperform the market today after it posted a more than doubling in net profit this morning.

But the big increase in profit and revenue isn’t the most exciting part of the result, although it will still be warmly welcomed by shareholders.

The medical diagnostic services group posted a 166% surge in first half net profit to $678 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 89% to $1.3 billion as revenue improved by a third to $4.4 billion.

Sonic share price gets COVID profit booster shot

The Sonic share price has been a COVID-19 winner as demand for COVID tests have hit the roof in all the countries it operates in.

Sonic undertook more than 18 million PCR tests to date in around 60 Sonic laboratories located around the world.

Demand for such tests is likely to persist for a while yet. Even as mass vaccinations are rolled out globally, testing is key to controlling the spread.

Other tailwinds behind Sonic’s share price  

But a bigger reason why I like its results is the operating leverage. Earnings have increased significantly ahead of revenue due to economies of scale.

Another exciting detail relates to its core business of testing and screening for non-COVID ailments. This part of the business took a big hit at the start of the pandemic due to social restrictions and patients fear of catching COVID at medical facilities.

“Our global base business revenue (excluding COVID testing) declined by 1% versus the comparative period, which was a very significant improvement versus the dramatic falls in base business we experienced from mid-March through May 2020,” said Sonic’s CEO, Dr Colin Goldschmidt.

“It appears our base business is becoming increasingly less affected by social restrictions and fear of infection, through better community understanding of the dangers in delaying or avoiding essential healthcare services.”

New growth opportunities

Sonic upped its interim dividend by 6%, or 2 cents, to 36 cents a share and the group’s gearing hit a record low. Sonic has $1.3 billion in liquidity before paying out the first half dividend.

That should still leave plenty in the tank to grow the business, and on that front, Sonic is striking an upbeat tone.

“Our management teams around the world are increasingly focussing on further growth opportunities, including acquisitions, contracts and joint ventures, supported by our very strong balance sheet,” added Goldschmidt.

“We are currently bidding on significant opportunities in Australia, the UK, the USA and Alberta, Canada.”

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia has recommended Sonic Healthcare 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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Santos Ltd (ASX: STO) shares will be in focus today after Australia’s second-largest oil and gas producer released its annual results this morning. By the market’s close on Wednesday, the Santos share price was fetching $7.04 after dropping by around 4% over the past month. 

Let’s take a look at what Santos reported.

Record annual production

The Santos share price will be on watch this morning after the company reported record annual production of 89 million barrels of oil equivalent (mmboe), up 18% on the year prior.

Despite this, the company still reported an annual net loss after taxes of US$357 million.

Santos advised that the net loss includes previously announced impairments primarily due to lower oil price assumptions. It further noted that both oil and LNG prices were significantly lower than the previous year due to coronavirus.

Sales revenue for the annual period dropped 16% from approximately US$4 billion in 2019 to around US$3.4 billion in 2020.

Santos generated US$740 million in free cash flow for the full year. This is 3.5 times greater than what was delivered in 2016 when oil prices were in a similar range.

The board resolved to pay a final dividend of US5 cents per share, fully franked. This is in line with the previous year’s final dividend and brings full-year dividends to US7.1 cents per share.

CEO commentary 

Reflecting on the annual results, Santos Managing Director and Chief Executive Officer Kevin Gallagher said:

2020 saw us ride through the bottom of the cycle while still generating free cash flow under a sustainable and disciplined operating model. As prices and demand recover, our projects are much better placed than those of our competitor countries. Living by our disciplined approach to cost and capital allocation, and remaining cash flow positive through 2020 means we are well positioned for further efficiency gains and growth initiatives in 2021.

He concluded that:

Our strongly cash-generative base business and diversified portfolio means that we are well positioned to drive free cash flow as commodity prices recover.

Santos share price snapshot

Over the past year, the Santos share price has fallen by around 13%. Santos shares fell as low as $2.73 during March 2020 before recovering to their current levels.

Based on the current Santos share price, the company has a market capitalisation of around $14.6 billion with 2.1 billion shares outstanding.

More reading

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price was a very strong performer on Wednesday.

The pizza chain operator’s shares finished the day 7.5% higher at $105.00.

This means the Domino’s share price is now up 83% over the last 12 months.

Why did the Domino’s share price surge higher?

Investors were fighting to get hold of Domino’s shares yesterday following the release of a strong half year result.

For the six months ended 31 December, Domino’s delivered a 16.5% increase in total global food sales to $1.84 billion. This strong top line growth was driven by same store sales growth of 8.5% and the opening of 131 organic new stores.

Thanks to operating leverage, Domino’s earnings before interest and tax (EBIT) grew 32.3% to $153 million and its underlying net profit after tax increased 32.8% to $96.2 million.

While this was ahead of the market’s expectations, arguably what got investors most excited was management’s outlook commentary.

Domino’s CEO and Managing Director, Don Meij, advised that the company intends “to significantly outperform this strong result in the Second Half.”

Is it too late to buy Domino’s shares?

Although the Domino’s share price has rallied strongly over the last 12 months, analysts at Goldman Sachs believe it can still go higher.

According to a note out of the investment bank, this morning the broker retained its conviction buy rating and lifted its price target to $112.60. This compares to its previous price target of $88.00.

Goldman Sachs commented: “Although short term performance has been positively impacted by the pandemic, DMP is in an increasingly strong position as it builds on recent momentum and takes advantage of opportunities in the market. We forecast both Japan and Europe to deliver significant store and earnings growth over the next three years, amounting to 24% and 23% EBITDA CAGR to FY23.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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In a dramatic escalation of tensions, Facebook Inc (NASDAQ: FB) on Thursday morning blocked Australian users from sharing or viewing news articles.

The social media giant, along with Alphabet Inc (NASDAQ: GOOGL), has been locked in a public argument with the Australian government about a proposed new media code.

The code is the first attempt in the world to try to force the platforms to share the revenue they earn from content produced by media companies.

As other nations are watching closely at the precedent the Australian deal might set, both tech companies had threatened to cut off their services during negotiations.

But Facebook’s move on Thursday is the first shut down actually implemented.

Facebook ANZ managing director William Easton said the proposed law “fundamentally misunderstands the relationship” between it and news publishers.

“It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia,” he wrote on a company blog.

“With a heavy heart, we are choosing the latter.”

Facebook says it’s different to Google 

Easton objected to Facebook and Google being treated in the same way through the proposed laws.

“Our platforms have fundamentally different relationships with news. Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content,” he said.

“On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue.”

Facebook had been in discussions with the Australian government for 3 years to reach a settlement reflective of this difference, according to Easton.

“Unfortunately this legislation does not do that. Instead it seeks to penalise Facebook for content it didn’t take or ask for.”

Easton added the “value exchange” between the social media platform and news publishers is well in favour of the latter.

“Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.” 

Facebook: we’re taking our money elsewhere

The social media platform had been preparing to launch Facebook News in Australia, but those plans have now been shelved.

“We were only prepared to do this with the right rules in place,” said Easton.

“We will now prioritise investments to other countries, as part of our plans to invest in new licensing news programs and experiences.”

The news ban now means Australian users will not be able to view or share any local or international news content.

Australian news publishers will not be able to post or share content, and overseas media companies will not have their articles viewed by Australians. Overseas users will not be able to view or share content produced by Australian news organisations.

“For Facebook, the business gain from news is minimal,” Easton said.

“News makes up less than 4% of the content people see in their News Feed.”

Facebook shares were down 0.15% overnight, while Alphabet shot up 0.38%.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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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All eyes will be on the CSL Limited (ASX: CSL) share price on Thursday.

This morning the biotech giant released its highly anticipated half year results.

How did CSL perform in the first half?

CSL was a very strong performer during the first half of FY 2021 and delivered a significant jump in profit.

For the six months ended 31 December, the company reported revenue of US$5,739 million, up 16.9% on the prior corresponding period. This was driven by a 9% increase in CSL Behring revenue and a 38% jump in Seqirus revenue. The latter was the result of a 44% increase in seasonal influenza vaccine sales.

On the bottom line, margin expansion led to the company delivering a 45% jump in reported net profit after tax to US$1,810 million.

Management advised that this reflects solid growth in its core immunoglobulin portfolio, the successful transition to its own distribution model in China, strong growth HAEGARDA sales, and an exceptionally strong performance by its Seqirus business.

In light of this, the CSL board has elected to increase its interim dividend by 9% to US$1.04 per share. Though, due to the strengthening of Australian dollar over the last 12 months, this is actually down 9% to A$1.34 in local currency.

CSL’s Chief Executive Officer and Managing Director, Paul Perreault, was pleased with the strong half year result.

He said: “I am pleased to report a strong result in an unprecedented time of uncertainty during the most severe pandemic of our lifetime. Guided by our values, our 27,000 dedicated employees remained focused on delivering on our promise to patients and public health. Our people and business model both demonstrated tremendous agility and resiliency in this most challenging of environments.”

What were the drivers of CSL’s growth?

The CSL Behring business delivered a 9% increase in total revenue to US$4,315 million and a 24% lift in earnings before interest and tax (EBIT) to US$1,665 million.

This was driven largely by a 7% increase in immunoglobulins sales and a massive 93% jump in albumin sales. The latter was thanks to its new distribution model in China. This was supported by a 1% increase in haemophilia sales and a 3% lift in speciality sales.

The Seqirus business was arguably the star of the show with a 40% increase in revenue to US$1,340 million and a 112% jump in EBIT to US$693 million.

This was driven by significant growth in seasonal influenza vaccines. Management notes that a record of over 100 million doses of NH 20/21 were given during the half.

Plasma collection headwinds

One thing that has been weighing heavily on the CSL share price this year has been concerns over plasma collection headwinds.

Mr. Perreault addressed this, saying: “Our plasma collections have been adversely affected during the pandemic. To combat this, we have implemented a number of initiatives to increase plasma collections and introduced a customer fulfilment process to ensure the equitable distribution of medicines to patients.”

“We remain the industry leader in opening new plasma collection centres and investing in future innovation – positioning CSL to emerge strongly when the COVID-19 crisis recedes,” he added.

However, the company has acknowledged that additional collection costs have been incurred, though it hasn’t quantified this.

Outlook

Mr Perreault is positive on the future, stating that: “Demand for CSL’s core plasma, and influenza vaccine products remains robust.”

Though, he has warned that the additional work it has been doing on COVID-19 vaccines in Australia has resulted in significant opportunity costs to its standard business and manufacturing operations.

As a result, there will be an increase in operations and research and development spend in the second half as its restarts projects and builds them back to scale.

In addition, given how its vaccines are seasonal, the Seqirus business is expected to make its customary loss in the second half.

In light of this, the company is forecasting a full year net profit after tax of US$2,170 million to US$2,265 million at constant currency. This is in line with previous guidance and represents year on year growth of 3% to 8%.

More reading

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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 CSL Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Nasdaq Composite (INDEX: .IXIC) has led the broader stock market higher for nearly a full year since the coronavirus bear market. On Wednesday, the Nasdaq led the broader market lower, falling almost 1% as of 1:30 p.m. EST even as other stock benchmarks were mixed.

Investors have seen extraordinarily good returns from individual Nasdaq stocks. Two of the biggest standouts have been electric vehicle giant Tesla Inc (NASDAQ: TSLA) and connected fitness equipment manufacturer Peloton Interactive Inc (NASDAQ: PTON), but today, the two high-flying growth stocks were headed lower. Below, we’ll take a closer look at what was sending Tesla and Peloton into the red on Wednesday.

Driving lower

Shares of Tesla were down about 2% on Wednesday afternoon, but that reflected a partial recovery from its worst levels of the day. Earlier in the morning, Tesla has been off more than 4% and falling to prices it hadn’t seen since the beginning of January.

The move came despite several recent pieces of positive news. Tesla is expected to open a manufacturing facility in India, according to a Tuesday Reuters report, which will open up a huge potential market for the electric-car maker. In addition, ARK Invest CEO and Chief Investment Officer Cathie Wood is continuing to add to positions in her lineup of actively managed exchange-traded funds (ETFs), speculating that Tesla could add a ride-hailing service to its list of aspirations.

Meanwhile, another Elon Musk-led company grabbed headlines on Wednesday. Privately held SpaceX reportedly completed a funding round at just under $420 per share, raising $850 million and establishing a value of $72 billion on the space exploration company. Although some have argued that Tesla could eventually join forces with other Musk-led businesses, others fear that the Tesla CEO could lose focus if he divides his time too much among his various interests.

Even a more extensive decline would still leave Tesla shareholders with plenty of gains over the past year. Nevertheless, with such staunch supporters for the stock, bargain hunters shouldn’t count on being able to pick up Tesla stock on the cheap.

Losing the race

Elsewhere, shares of Peloton Interactive were down more than 7%. The move came amid a broader move lower for stay-at-home stocks, driven in part by falling COVID-19 case counts and the possibility of a return to more normal conditions in the coming year.

Yet Wall Street analysts still have hopes that Peloton will remain a successful stock. Analysts at Argus kept their buy recommendation on Peloton, boosting their share price by $40 per share to a new level of $180. As Argus sees it, the stationary bike maker is still seeing unprecedented demand, and even as the vaccine rollout progresses, gyms could still be among the last places that open up fully and return to pre-pandemic conditions.

Today, though, investors seem to be thinking twice about sky-high valuations. Even Argus expects that Peloton will make just 90 cents per share in fiscal 2022. That puts the stock at 150 times forward earnings even after today’s drop.

Peloton has had the ride of a lifetime, but some investors want to see what happens down the road. If the fitness equipment company can fulfil orders more effectively and keep capturing rising demand, then its stock could bounce back from Wednesday’s setback.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Peloton Interactive and Tesla. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch on Thursday.

This follows the release of the banking giant’s first quarter update this morning.

How did ANZ perform in the first quarter?

For the three months ended 31 December, the banking giant reported an unaudited statutory profit after tax of $1,624 million. This was a 59% increase on the average profit it achieved during the final two quarters of FY 2020.

It was a similarly positive story for its unaudited cash earnings from continuing operations, which came in at $1,810 million. This is a 54% jump on the average of the last two quarters of FY 2020.

Another positive is that the bank has followed the lead of Westpac Banking Corp (ASX: WBC) by reversing some of its COVID-19 related provisions. This could go down well with the market and support the ANZ share price today.

According to the release, the total provision result in the December quarter was a net release of $150 million. This comprises an individually assessed provision charge of $23 million and a collective provision release of $173 million.

Management advised that the collective provision release is the equivalent of ~10% of the $1,700 million set aside during FY 2020. It feels this release is prudent when balancing the improvement in the economic outlook at the end of the December quarter with the level of ongoing uncertainty.

At the end of the period, the company had a pro forma CET1 ratio of ~11.8%. This is comfortably ahead of APRA’s unquestionably strong benchmark.

Management commentary

ANZ’s Chief Executive, Shayne Elliott, commented: “This is a strong performance in volatile trading conditions that again highlights the benefits of disciplined execution of our strategy as well as maintaining a simpler and well balanced portfolio of businesses.”

“We’re pleased to have achieved these results for shareholders while also helping customers in difficulty and providing the vital lending needed to support the economic recovery. All our major businesses performed well through the quarter with market share gains in our key home loan market in Australia as well as record home loan volumes in New Zealand.”

Mr Elliott revealed that its Institutional business also performed well during the quarter.

He explained: “Our diversified portfolio in Institutional delivered again for shareholders with a strong contribution from our international network. Markets had another solid quarter although revenue was down relative to the historic highs we experienced at the end of last year.”

Another positive is that ANZ’s margins have been improving.

The Chief Executive said: “Margins were up across the group due to higher volume growth in targeted segments and a disciplined and active approach to risk and pricing. The combination drove Group revenue up 4% for the quarter when excluding the impact of our Markets business.”

Outlook

Mr Elliott appears optimistic on the future, which could bode well for the ANZ share price today.

He commented: “ANZ is well positioned heading into the remainder of 2021 with good momentum in our core activities. The work done to simplify and de-risk the business over the past five years set us up well and we have the capital, liquidity and operational capacity to continue to support our customers and the broader economy through what remains a volatile period.”

More reading

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Pro Medicus Limited (ASX: PME) share price has been a strong performer in 2021.

Since the start of the year, the health imaging company’s shares have rallied an impressive 27% higher.

This means the Pro Medicus share price has now doubled in value over the last 12 months.

Is it too late to buy Pro Medicus shares?

The good news for investors is that it may not be too late to buy Pro Medicus shares.

According to a note out of Goldman Sachs this morning, the broker has upgraded its shares to a buy rating with a $53.80 price target.

This price target implies potential upside of approximately 20% over the next 12 months.

Why is Goldman Sachs bullish on Pro Medicus?

Goldman has been impressed with the way the company continues to win large contracts in a difficult operating environment.

It explained: “Whilst many healthcare IT projects continue to face uncertainties associated with Covid-19, the demand for PME’s Visage 7 PACS technology has been robust, speaking to the strength of the solution, as well as the growing importance of an IT system that can improve efficiencies whilst healthcare imaging data continues to grow exponentially.”

“Through a highly challenging period, the cadence of PME’s contract wins has actually increased, whilst the quality/breadth of the customer base has also strengthened. In the last 8 months alone, PME has signed 6 new contracts at an average minimum size of $24m, including a further 3 of the Top 10 hospitals in the country (against a trailing 3-year average of 5 and $15m respectively),” it added.

The broker believes this provides strong validation of its technology advantage over the competition.

What is Goldman forecasting?

Although Pro Medicus shares clearly trade at a premium to the market average, Goldman believes its growth profile justifies this.

It explained: “Whilst not cheap in absolute terms, our new estimates imply a +42% EBITDA CAGR (FY20-23E). In the context of ASX Healthcare, which trades at a ‘multiple to growth’ ratio of 2.9x, we do not see PME’s ratio of 1.4x as demanding, particularly given its position as a technology leader in a market we believe is set for further technology upgrades, and a recurrent revenue model with inherent upside. We upgrade to Buy.”

All eyes will be on the Pro Medicus share price at the open.

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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 recommends Pro Medicus Ltd. The Motley Fool Australia has recommended Pro Medicus 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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Are you looking to add a growth share or two to your portfolio? Then take a look at the two ASX shares listed below.

Here’s why they could be growth shares to buy right now:

ELMO Software Ltd (ASX: ELO)

The first ASX growth share to look at is ELMO. It is a cloud-based human resources and payroll software company that provides businesses with a unified platform to streamline a wide range of processes.

ELMO has been a strong performer during the pandemic and looks well-placed to continue this trend over the next decade. This is thanks to strong demand for its platform and recent acquisitions. The latter has bolstered its offering and expanded its addressable market.

Earlier this week Morgan Stanley put an overweight rating and $9.70 price target on its shares. This was in response to the release of its half year results on Tuesday. Those results revealed a 42.8% increase in Annualised Recurring Revenue (ARR) to a record $74.2 million.

Nearmap Ltd (ASX: NEA)

Another ASX growth share to look at is Nearmap. It is a leading aerial imagery technology and location data company. Its platform provides businesses in the ANZ and North American markets with instant access to high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools.

Nearmap appears well-placed for growth thanks to its recent capital raising, new growth initiatives, geographic expansion, and the launch of its latest AI product. So much so, management is targeting annualised contract value (ACV) growth of 20% to 40% per annum over the long term, with underlying churn of less than 10%.

Analysts at Goldman Sachs are positive on the company and were pleased with its half year results this week. In response to them, the broker put a buy rating and $2.95 price target on Nearmap’s shares. 

More reading

• Here’s why the Nearmap (ASX:NEA) share price jumped 7% higher today
• Top brokers name 3 ASX shares to buy today
• Where next for the Nearmap (ASX:NEA) share price?
• Here’s why the ELMO (ASX:ELO) share price is surging 6% higher today
• ASX 200 rises, JB Hi-Fi profit soars, Altium drops

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 recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Elmo Software and Nearmap 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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