There are a large number of ASX shares to choose from on the Australian share market.
Two that come highly rated are listed below. Here's why these ASX shares are being tipped as buys:
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Hipages Group Holdings Ltd (ASX: HPG)
The first ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies.
Hipages has been growing at a strong rate in recent years and appears well-placed to continue this trend in the future. Particularly given its leadership position in Australia and the recent agreement to acquire New Zealand-based rival Builderscrack that gives it access to a NZ$26 billion total addressable market.
In response to the news, the team at Goldman Sachs maintained their buy rating and lifted their price target on the company's shares to $5.15. The broker sees a material growth opportunity ahead for Hipages and is forecasting a 24% revenue CAGR and a 38% EBITDA CAGR from FY 2021 to FY 2024. It also notes that the company currently only captures 5% of total industry advertising spend at present. Whereas the broker sees scope for this to grow materially in the future as its ecosystem builds out.
It commented: "We see HPG as an attractive medium-term growth stock – HPG currently captures c.5% of the total industry advertising spend; by contrast REA/CAR capture c.40-60% of spending in their respective categories. As HPG builds out its ecosystem (including the imminent launch of the new "TradieCore" field service software solution), we see scope for HPG to increase its share towards these levels over the long term as the marketplace leader."
Life360 Inc (ASX: 360)
Another ASX share to look at is Life360. It operates in the digital consumer subscription services market and has a focus on products and services for digitally native families. This is where all members of the household are connected by smartphones. A massive 33.8 million monthly active users are using its app at present, which is underpinning stellar recurring revenue growth. In addition, Life360 has significant opportunities to monetise its user base further in the future through cross and upselling opportunities and acquisitions.
Bell Potter is bullish on Life360. It has a buy rating and $15.00 price target on the company's shares. The broker is forecasting revenue growth of 37% to $110.8 million in FY 2021 and then the more than doubling of it to US$273 million in FY 2022. It expects this to be underpinned partly by the monetisation of its huge user base.
The broker said: "Life360 has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents. An example is roadside assistance where Life360 launched a subscription-based product called Driver Protect which disrupted the market and helped enable monetisation of its user base. Other markets Life360 could potentially enter include insurance, item & pet tracking, senior monitoring, home security and/or identity theft."
