2 ASX growth shares that could be buys

These growth shares could be in the buy zone…

| More on:
Three excited business people cheer around a laptop in the office

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're wanting to add some growth shares to your portfolio in September, then you may want to check out the two listed below.

Here's why analysts are tipping these ASX shares as buys:

IDP Education Ltd (ASX: IEL)

The first ASX growth share to look at is IDP Education. It is a provider of international student placement and English language testing services.

While trading conditions have been difficult because of the pandemic, the company appears well-positioned for growth once trading conditions normalise. Particularly given its recent acquisition of the British Council's Indian International English Language Testing System for A$240 million. This transaction is expected to be approximately 13% earnings per share accretive (pre-synergies) on a pro forma calendar year 2019 basis.

Goldman Sachs is very positive on the company and believes it has strong long term growth potential.

It commented: "The long term growth opportunity for IEL is compelling. The company is reinvesting in digital capability that will increase its competitive advantage and strengthen its relationship with tertiary education institution clients. We estimate IEL to have <5% market share of the Canada and UK markets, with significant opportunity to gain share in a highly fragmented and under-penetrated market."

The broker currently has a buy rating and $34.00 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another ASX growth share to look at is Nitro Software. It is a software company that is aiming to drive digital transformation in organisations around the world via its Nitro Productivity Suite. This product provides integrated PDF productivity and electronic signature tools to customers.

Demand for its offering continues to grow thanks to its quality and a number of positive industry tailwinds. This includes the global shift to remote and digital work, which is being accelerated by the pandemic.

During the first half of FY 2021, the company delivered a 56% increase in its annualised recurring revenue (ARR) to US$33.8 million. This puts it on track to achieve its FY 2021 guidance for ARR of between US$39 million and US$42 million.

Bell Potter is very positive on the company. It is the broker's "number one pick given the slight pullback in share price following the 1H2021 result – which was good but not great – and our expectation the next few results (i.e. 2H2021, 1H2022 and 2H2022) will all show strong top line growth on the back of the increase in sales staff in 1H2021 and also the recent commencement of charging for eSigning."

Bell Potter has a buy rating and $4.00 price target on its shares.

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 Idp Education Pty Ltd. 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 ⏸️ Growth Investing

share price gaining
⏸️ Growth Investing

2 stellar ASX growth shares rated as buys

Analysts think these ASX growth shares are in the buy zone...

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
⏸️ Growth Investing

2 ASX growth shares analysts rate as buys right now

Check out these top growth shares...

Read more »

A man holds up his hand with 3 fingers up
⏸️ Growth Investing

3 excellent ASX growth shares named as buys

Analysts rate these ASX growth shares highly right now...

Read more »

white arrows symbolising growth
⏸️ Growth Investing

2 growing ASX shares that analysts rate as buys

Looking for growth options? Here are two highly rated shares...

Read more »

chart showing an increasing share price
⏸️ Growth Investing

2 excellent ASX growth shares named as buys

These growth shares could be in the buy zone...

Read more »

rising asx share price represented by stack of coins with green shoots on top
Share Gainers

The Australian Ethical Investment (ASX:AEF) share price is up 124% this year!

Let's take a closer look.

Read more »

A smiling woman holds a bunch of flowers, indicating growth
⏸️ Growth Investing

2 outstanding ASX growth shares named as buys

These growth shares could be in the buy zone...

Read more »

Three young nerds dressed in suits with thinking caps and lightbulbs
⏸️ Growth Investing

3 excellent ASX share ideas for investors this week

Here are three top ASX share ideas...

Read more »