Fortunately for growth investors, the Australian share market is home to a large number of companies with the potential to grow strongly over the coming years.
Two growth shares that have been tipped for big things are listed below. Here's why they have been named as buys:
a2 Milk Company Ltd (ASX: A2M)
It has been a difficult few months for a2 Milk Company. Due to significant weakness in the daigou channel and pantry stocking at the height of the pandemic, the company's sales have deteriorated materially in the first half of FY 2021. Management recently warned that first half revenue is expected to be in the range of NZ$725 million to NZ$775 million. This will be a 3.9% to 10.1% decline over the prior corresponding period.
While this is disappointing, one broker that believes investors should be looking beyond this short term headwind and focusing on its positive long term outlook is Morgans. It recently put an add rating and $17.28 price target on a2 Milk shares. The broker believes recent weakness in the a2 Milk share price is a buying opportunity.
Nearmap Ltd (ASX: NEA)
Nearmap is a leading aerial imagery technology and location data company. Its platform provides businesses with instant access to high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools.
Management believes the company is well-placed for growth thanks to its recent capital raising, new growth initiatives, geographic expansion, and the launch of its latest AI product. It 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 Morgan Stanley are positive on the company's prospects in the future. The broker recently retained its overweight rating and $3.10 price target on its shares. This compares to the current Nearmap share price of $2.20.
