It is fair to say that 2022 has not been kind to growth shares. But every cloud has a silver lining.
On this occasion, that silver lining is that a number of quality shares are trading at a significant discount to where they traded just three months ago.
Here's why these beaten down ASX growth shares could be in the buy zone now:
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Life360 Inc (ASX: 360)
The first ASX share to look at is Life360. It is a location-based services provider based in San Francisco, United States with 33 million+ monthly active users. Its shares have lost almost half of their value since the start of the year after investors abandoned growth shares and particularly those that were not yet profitable.
The team at Bell Potter believe this is a buying opportunity and remain very positive on its long term outlook. Particularly given its opportunity to monetise is massive user base and its robust balance sheet. The broker believes the latter is more than sufficient to see Life360 through to profitability.
Bell Potter currently has a buy rating and $10.00 price target on its shares. This is almost double where its shares trade at today.
Xero Limited (ASX: XRO)
Another ASX growth share that could be in the buy zone is Xero. It is a leading cloud-based business and accounting software provider which boasts over 3 million subscribers globally.
Xero's shares have also fallen heavily in 2022 and are now down by approximately a third since the turn of the year.
Analysts at Goldman Sachs see this as a buying opportunity for investors, noting that its shares are trading close to pre-COVID levels. This is despite the cloud accounting company being in a much stronger position now and the broker expecting a 24% compound annual growth rate for Xero's gross profit between FY 2021 and FY 2025
As a result, Goldman recently retained its buy rating with a trimmed price target of $135.00.
