Why Zip (ASX:Z1P) and this ASX growth share could be buys

Check out these top growth shares in July…

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If you’re interested in adding some growth shares to your portfolio in July, then you may want to look at the ones listed below.

Here’s why they have been rated as buys:

REA Group Limited (ASX: REA)

The first ASX growth share to consider is REA Group. It is of course the dominant player in real estate listings in the Australian market with its realestate.com.au website.

REA Group has been growing at a consistently solid rate over the last decade and has been tipped to continue this trend over the next decade. This is thanks to its strong market position, a booming housing market, international operations, and recent acquisitions.

In respect to acquisitions, REA Group has just announced the completion of its acquisition of Mortgage Choice and a 34% stake in mortgage software company Simpology. This is expected to help REA Group capture a growing share of the mortgage broker market in the coming years.

Analysts at Goldman Sachs are very positive on its outlook. Earlier this week, the broker retained its buy rating and lifted its price target to $198.00. This compares to the current REA Group share price of $165.61.

Zip Co Ltd (ASX: Z1P)

Another ASX growth share to look at is this leading buy now pay later (BNPL) provider. In FY 2021, Zip has been growing at a rapid rate yet again.

For example, after delivering stellar growth in the first half, the company built on this during the third. This was particularly the case in the United States, where its QuadPay business reported third quarter transaction volume growth of 234% to $762 million. This was driven by a 153% increase in US customers to 3.8 million.

Pleasingly, this is still only a very small slice of a US retail market worth an estimated $5 trillion per year. This gives Zip’s QuadPay business a very long runway for growth as BNPL adoption rates increase and credit card usage declines. This should be supported by its expansion into Europe and Asia via recent acquisitions.

Morgans is expecting Zip’s strong growth to continue. As a result, it has an add rating and $10.39 price target on the company’s shares currently. This compares to the latest Zip share price of $7.25.

Should you invest $1,000 in Zip right now?

Before you consider Zip, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Zip wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor 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 and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended REA Group Limited. 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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