2 highly rated ASX growth shares

These companies are growing at a very quick rate…

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A new month is here, so what better time to look for new additions to your portfolio.

If you have room for a growth share or two, you might want to consider the shares listed below. Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. This appliance manufacturer has been growing at a solid rate in recent years thanks to its international expansion and favourable industry tailwinds.

In respect to the latter, COVID-19 has led to more cooking and working at home, which has underpinned an increase in demand for whitegoods such as cooking equipment and coffee machines.

Demand was so strong that Breville reported stellar sales and profit growth during the first half of FY 2021. The company posted a 28.8% increase in revenue to $711 million and a 29.2% increase in net profit after tax to $64.2 million.

Looking ahead, management is confident its strong performance will continue in the second half. It is guiding to earnings before interest and tax of $136 million. This is up from its previous guidance of $128 million to $132 million and will be a 20% increase year on year.

UBS is positive on its long term growth thanks to its strong market position, new product launches, and its expansion into new markets. The broker has a buy rating and $35.70 price target on its shares.

NEXTDC Ltd (ASX: NXT)

Another ASX growth share to look at is NEXTDC. It has nine world class data centres across Australia and a rich partner ecosystem that comprises over 660 clouds, networks, and ICT specialty services. It is also currently looking to expand its offering into both Singapore and Tokyo, which offer huge market opportunities.

In the meantime, though, NEXTDC is generating significant revenue and earnings in the Australian market. For example, during the first half of FY 2021, the company reported a 27% increase in data centre services revenue to a record $121.6 million and a 29% increase in EBITDA to $65.7 million. This was underpinned by a 33% lift in contracted utilisation to 71MW, a 16% lift in customers, and a 16% rise in interconnections.

Positively, more of the same is expected in the second half. This is being driven by the ongoing shift to the cloud, which has led to very strong demand for capacity in its centres. So much so, a good portion of its planned capacity additions have already been contracted.

UBS is also a fan of NEXTDC. Its analysts currently have a buy rating and $15.40 price target on its shares.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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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