When looking at growth shares, I like to focus on ones that have long runways for growth. This is because these companies have the potential to generate strong long term returns, allowing investors to benefit from compounding.
Three ASX growth shares which have been tipped for big things in the future are listed below. Here’s why they are highly rated:
Kogan.com Ltd (ASX: KGN)
This ecommerce company could be worth a look due to the continued rise in online shopping. In addition to this, its expansion into potentially lucrative verticals, the growing popularity of Kogan Marketplace, and recent acquisitions should support its growth in the coming years.
Although Kogan’s shares have surged higher over the last 12 months, analysts at Credit Suisse believe they can still go higher. The broker currently has an outperform rating and $21.08 price target on its shares.
Pushpay Holdings Group Ltd (ASX: PPH)
Another highly rated ASX growth share to consider is Pushpay. It is leading donor management and community engagement platform provider with a focus on the faith sector. Pushpay has been growing at a rapid rate in FY 2021 and expects to achieve full year operating earnings of US$56 million and US$60 million. This will be up a massive 123% to 139% year on year.
Positively, this is still scratching at the surface of its addressable market in the United States, which gives it a long runway for growth over the 2020s. Management is aiming to win a 50% share of the medium to large church market. This slice is estimated to be worth US$1 billion in revenue per annum at present.
Analysts at Goldman Sachs are positive on the company. They have a conviction buy rating and $2.59 price target on its shares.
Xero Limited (ASX: XRO)
A final ASX growth share to look at is this cloud-based business and accounting software provider. Despite the pandemic’s impact on small businesses, Xero has continued to perform strongly in FY 2021. This has gone down well with analysts at Goldman Sachs. They were impressed with its performance in the first half and believe it can still grow materially over the next decade and beyond.
It currently has a buy rating and $157.00 price target on its shares. Goldman believes Xero can achieve a 2030 subscriber footprint of 7.4 million and generate NZ$3.4 billion in annual revenue.
But even better, the broker doesn’t expect its growth to stop there. Its analysts see opportunities for Xero to monetise its app ecosystem and drive multi-decade strong growth.
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