The Australian share market is home to a number of quality companies with solid growth prospects.
Two that have been tipped to grow strongly over the long term are listed below. Here's why analysts think investors should be buying these shares:
Domino's Pizza Enterprises Ltd (ASX: DMP)
The first growth share to look at is this pizza chain operator. Domino's has been growing strongly for over a decade thanks to its store expansion (both at home at overseas), its investment in technology, and the ongoing popularity of its offering.
In respect to its expansion, at the end of FY 2021, Domino's was operating 2,949 stores across its sprawling network. While this is large, management sees scope to more than double this to 6,650 stores by FY 2033. And that's just in existing markets. The company is also on the lookout for acquisitions, which could see it enter new markets in the future, giving it a larger opportunity.
And while a recent trading update revealed that its performance has been a touch volatile in FY 2022, the team at Goldman Sachs remains positive. Its analysts recently reiterated their buy rating and $147.00 price target on the company's shares.
ELMO Software Ltd (ASX: ELO)
Another growth share to look at is ELMO. It is a cloud-based human resources and payroll software company with operations in the ANZ and UK markets.
ELMO has been growing at a consistently strong rate over the last few years despite whatever the economy throws at it. For example, in FY 2021 the company reported annualised recurring revenue (ARR) growth of 52.1% to $83.8 million.
It then followed this up during the first quarter of FY 2022 with a 61% increase in ARR over the prior corresponding period to $88.5 million. This growth is being driven by the benefits of acquisitions but also strong organic growth and puts it on course to achieve its full year guidance of ARR of $105 million to $111 million.
Positively, this is still only a fraction of its significant market opportunity, which management estimates to be worth $12.8 billion per year.
Morgan Stanley is a fan of ELMO. It currently has an overweight rating and $7.80 price target on its shares.
