2 buy-rated ASX growth shares that analysts say can double

Here are two growth shares that could double…

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If you’re a fan of growth shares, then you may want to look closely at the two shares listed below.

Here’s why these growth shares have been rated as buys:

Adore Beauty Group Limited (ASX: ABY)

The first ASX growth share to look at is Adore Beauty. It is a leading online retailer in the ~$11 billion Australian beauty and personal care (BPC) market.

Adore Beauty has almost 1 million active customers and generated revenue of $113.1 million from them during the first half of FY 2022. This was up 18% over the prior corresponding period, which is no easy feat given the COVID boost it received during the prior period.

However, despite this solid growth and its positive outlook from the shift to online shopping, the company’s shares continue to trend lower and lower and recently hit a new low. And while they could yet fall further, one leading broker is tipping its shares to more than double over the next 12 months.

That broker is UBS, which currently has a buy rating and $4.70 price target on its shares. This compares to the latest Adore Beauty share price of $1.80.

Nitro Software Ltd (ASX: NTO)

Another ASX growth share to look at is Nitro Software. It is a global document productivity software company behind the Nitro Productivity Suite. It provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.

As with Adore Beauty, Nitro’s shares have fallen heavily from their highs. Goldman Sachs sees this as a buying opportunity. It is bullish on the company due to its growth potential as a challenger in a US$34 billion total addressable market across PDF productivity, e-signing and workflows.

It commented: “Nitro is down ~50% [now 62%] since November with the market currently pricing in long-term growth and margin assumptions that understate Nitro’s potential, in our view. We are positive on Nitro’s structural growth opportunity, reflected in our DCF scenario analysis implying an attractive asymmetric risk/reward skew.”

Goldman Sachs has a buy rating and $2.60 price target on its shares. This compares to the latest Nitro share price of $1.31.

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. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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