Fortunately for growth investors, there are plenty of shares on the Australian share market with strong long term growth potential.
Two such shares that have been named as buys are named below. Here's why analysts are positive on them:
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NextDC Ltd (ASX: NXT)
The first growth share that could be a buy is NextDC. It is a leading data centre operator which appears well-placed to benefit from the structural shift to the cloud.
Especially given the company's world class network of centres across key locations throughout Australia.
In addition, NextDC has its eyes on edge centres (regional data centres) and the Asia market. The latter has seen the company open up offices in Singapore and Tokyo. These markets could provide NEXTDC with a long growth runway.
Citi is a fan and is forecasting strong earnings growth over the coming years. As a result, it currently has a buy rating and $14.55 price target on NEXTDC's shares.
Xero Limited (ASX: XRO)
Another ASX growth to look at is Xero. It is a cloud-based accounting solution platform provider to small and medium sized businesses globally.
Xero has been growing at a rapid rate in recent years and continued this trend in FY 2022. Earlier this month, the company released its full-year results and revealed a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue (AMRR) to NZ$1.2 billion. This was underpinned by a 19% increase in total subscribers to 3.3 million thanks to growth in all markets.
Positively, Xero's subscriber count is still well short of its total addressable market of 45 million subscribers globally. This and its plan to monetise its growing user base give it a very long growth runway in the 2020s.
Goldman Sachs is bullish on Xero and believes it has a multi-decade growth runway. Its analysts currently have a buy rating and $118.00 price target on its shares.
