Looking for growth shares to buy? Then you might want to consider the three listed below.
Here's why they have been tipped as growth shares to buy:
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PointsBet Holdings Ltd (ASX: PBH)
The first ASX growth share to look at is PointsBet. It is a leading sports betting company with operations in both the ANZ and US markets.
From these markets, the company is currently generating significant revenue. For example, last week PointsBet revealed that its full year turnover reached $3,781.4 million in FY 2021. This was up an impressive 228% on FY 2020's turnover. Driving this strong growth was a 117% annual increase in Australian active clients to 196,585 and a 661% increase in US active clients to 159,321.
The good news is that the company is only scratching at the surface of its massive US market opportunity. For example, Goldman Sachs notes that the US sports betting market is forecast to grow at a compound annual growth rate of 40% out to 2033. It estimates that it will be worth US$39 billion a year at that point.
Goldman currently has a buy rating and $14.90 price target on its shares. This compares to the latest PointsBet share price of $10.00.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is Australia's leading online furniture and homewares retailer. It has been growing at a strong rate over the last few years and particularly during the pandemic. This has been driven by the accelerating shift to online shopping.
This strong form continued in FY 2021, with Temple & Webster recently releasing its full year results and revealing stellar growth again.
For the 12 months ended 30 June, Temple & Webster delivered an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million. A key driver of its growth in FY 2021 was another strong increase in customer numbers. At the end of the period, Temple & Webster's active customers were up 62% year on year to 778,000.
Pleasingly, this positive momentum has continued early in FY 2022. Management revealed year on year revenue growth of 39% for the period 1 July to 24 July.
Looking longer term, Temple & Webster appears well-positioned for growth thanks to its strong market position and the structural shift online. The latter is still in its infancy, with very low penetration rates compared to other categories and other Western markets.
One leading broker that is very positive on Temple & Webster is Credit Suisse. Late last month the broker put an outperform rating and $14.62 price target on its shares. This compares to the current Temple & Webster share price of $12.21.
