If you have room for a tech share or two in your portfolio, then you might want to consider the two listed below.
Here's why these ASX tech shares are highly rated:
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Life360 Inc (ASX: 360)
The first tech share to look at is this San Francisco-based technology company behind the eponymous Life360 mobile app. This is a market leading family-focused app with over 28 million monthly active users globally.
Despite facing headwinds during COVID-19 from lockdowns and lower mobility, Life360 still delivered an impressive 39% increase in normalised revenue to US$81.6 million for the 12 months ending 31 December. Pleasingly, its strong form has continued so far in FY 2021.
As well as announcing the creation of a Family Advisory Council that will bring together well-known celebrities and influencers to help shape the company's product and marketing strategy, Life360 revealed that it expects its annualised monthly revenue to land towards the higher end of its guidance of US$110 million to US$120 million in 2021. The high end represents a 34% year on year increase.
Morgan Stanley is positive on the company and recently initiated coverage on its shares with an overweight rating and $8.60 price target. It has been impressed with the company's user base growth and feels that the market under appreciates this.
Xero Limited (ASX: XRO)
Another ASX tech share to look at is Xero. Like Life360, it has been growing strongly over the last 12 months.
For example, the small business and accounting platform provider delivered an 18% increase in revenue to NZ$848.8 million in FY 2021. Key drivers of this growth were its international expansion and the shift to the cloud. These helped underpin a 20% increase in subscribers to 2.74 million.
The good news is that this represents just ~6.1% of its cloud accounting subscriber total addressable market of 45 million. This gives it a long runway for growth. As does its app ecosystem, which has been tipped to be a key driver of growth in the decades to come.
Goldman Sachs is bullish on Xero's future and believes the company could have a multi-decade runway for growth. As a result, it currently has a buy rating and $151.00 price target on its shares.
