The Australian share market is home to a good number of growth shares which have the potential to grow their earnings at an above-average rate over the next few years.
Three growth shares that I think are amongst the best on the market are listed below. Here's why they could be worth considering:
Altium Limited (ASX: ALU)
One of my favourite growth shares on the ASX would have to be Altium. I believe the electronic design software company has outstanding long-term growth potential thanks to its exposure to the rapidly growing Internet of Things (IoT) market. As the vast majority of IoT devices contain printed circuit boards (PCBs) inside them, I expect demand for its award winning PCB design software, Altium Designer, will grow materially over the next decade. Management certainly expects this to be the case. This year it revealed an aspirational revenue target of $500 million by FY 2025. This compares to its guidance of US$205 million to US$215 million in FY 2020.
Appen Ltd (ASX: APX)
Another growth share that I rate highly is Appen. It is the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. It has been experiencing very strong demand for its Content Relevance services from many of the largest technology companies. This has led to some very impressive earnings growth, which has been bolstered by acquisitions. In FY 2019 the company expects to deliver underlying EBITDA in the range of $96 million to $99 million, which represents year on year growth of 34.6% to 38.8%. I expect more of the same in FY 2020 and beyond thanks to the expected strong growth of the AI and machine learning market.
Nanosonics Ltd (ASX: NAN)
A final growth share to consider buying is Nanosonics. It is a leading infection control specialist which is best-known for its trophon EPR disinfection system for ultrasound probes. This industry-leading technology has been growing its market share at a rapid rate over the last few years, resulting in stellar hardware and consumables sales growth. Pleasingly, Nanosonics won't be a one-trick pony in the near future. It is aiming to launch several new products targeting unmet needs in the coming years. One of these should be released at the end of FY 2020. Given its excellent reputation, industry contacts, and existing distribution network, I believe these new products could underpin strong sales growth over the next decade.
