2 quality ASX growth shares with heaps of potential

Afterpay Ltd (ASX:APT) and this ASX growth share have heaps of potential. Here’s what you need to know about them…

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If you’re looking to invest in a growth share or two, then you might want to consider the ones listed below.

Here’s why these ASX shares could be top options for growth investors:

Afterpay Ltd (ASX: APT)

The first option to look at is Afterpay. This buy now pay later (BNPL) focused payments company has been growing at an explosive rate over the last few years.

This has been driven largely by the successful export of its platform into the United States and UK. The good news is that the payment method continues to resonate with consumers and merchants, which is underpinning rapid customer growth across the globe.

Pleasingly, with the company expanding onto Mainland Europe and weighing up its options in the Asia market, Afterpay still has a significant runway for growth in the BNPL market over the 2020s. This should be complemented by its expansion into other products such as bank accounts and cash flow tools.

One broker that is confident in its growth trajectory is Morgan Stanley. Earlier this month the broker put an overweight rating and $149.00 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX growth share to look at is Pushpay. It is leading donor management and community engagement platform provider for the faith sector.

As with Afterpay, Pushpay has been growing at a quick rate in recent years. This has been driven by the shift to a cashless society, the digitisation of the church, and its industry-leading platform.

Earlier this month the company released its full year results for FY 2021. Pushpay reported a 40% increase in operating revenue to US$179.1 million and a 133% jump in EBITDAF to US$58.9 million. The latter was at the high end of its guidance for EBITDAF of between US$56 million and US$60 million. It is worth noting that this guidance was upgraded three times during the course of the year.

And while the company’s growth will moderate in FY 2022, it is still targeting growth that other companies would be envious of. Pushpay advised that it expects its EBITDAF to increase 12% to 20.5% year on year. However, as we have seen previously, Pushpay has a tendency to under promise and over deliver. There’s every chance this guidance will be upgraded as the year progresses.

Looking further ahead, Pushpay appears well-placed for growth over the coming years thanks to industry tailwinds and also its expansion into new markets. One of those is the lucrative Catholic church market, which the company is entering this year. It is then aiming to win 25% of the Catholic church management system and donor management system market over the next five years.

Ord Minnett currently has a $1.84 price target on the company’s shares.

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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 AFTERPAY T FPO and PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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