Here are 2 excellent buy-rated ASX tech shares

Xero Limited (ASX:XRO) and this ASX tech share could be quality options for investors. Here’s why they are rated as buys…

| More on:
women with a microphone is happy whilst using a computer

Image source: Getty Images

If you’re looking for growth shares to buy, then the tech sector could be a great place to search. At this side of the market there are a number of companies with the potential to grow materially over the next decade.

With that in mind, I have picked out two top tech options to consider. Here’s what you need to know about them:

Nitro Software Ltd (ASX: NTO)

The first tech share to look at is Nitro. It is a global document productivity company helping businesses of all sizes eliminate paper, accelerate business processes, and drive digital transformation.

This is achieved by providing PDF productivity and eSigning for all in a single, affordable solution.

At present, Nitro is helping more than 11,000 businesses globally drive  digital transformation. This includes 68% of the Fortune 500 and three of the Fortune 10.

Demand for its offering continues to grow and is underpinning strong recurring revenue growth. For example, Nitro’s guidance for FY 2021 is ARR in the range of $39 million to $42 million. This will mean year on year growth of 41% to 51.6%.

Morgan Stanley is bullish on the company. Its analysts currently have an overweight rating and $3.70 price target on the company’s shares.

Xero Limited (ASX: XRO)

Another ASX tech share to look at is Xero. Over the last few years it has evolved from an accounting platform provider into a full service cloud-based business and accounting solution to small and medium sized businesses globally.

This evolution has been a huge success and underpinned very strong customer and revenue growth. Positively, Xero still has a long runway for growth over the next decade, or decades, according to analysts at Goldman Sachs.

This is thanks to its international expansion, the shift to the cloud, and the monetisation of its app ecosystem. It is the latter that Goldman Sachs is most positive on. It believes Xero could have a multi-decade runway for strong growth if management can successfully monetise its app ecosystem. 

Goldman has a buy rating and $153.00 price target on its shares.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

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 Xero. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares