If you're a fan of growth shares like I am, then you may want to hear what analysts are saying about the shares listed below.
Both have been named as buys and tipped to continue growing strongly for the foreseeable future. Here's what they're saying:
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Breville Group Ltd (ASX: BRG)
The first ASX share that is growing strongly is leading appliance manufacturer, Breville.
Thanks to the popularity of its brands, its international expansion, and management's ongoing investment in research and development, Breville has been growing its sales and earnings at a solid rate for a decade.
This continued in FY 2022, with the company reporting a 19.4% increase in revenue to a record of $1.42 billion and a 16.2% jump in net profit after tax to $105.7 million.
Goldman Sachs has become even more positive on the company following this results release. This is due to its exposure to some powerful trends and its strong brands. It said:
BRG reported in-line 2H22/FY22 results, with sales, EBIT and NPAT in-line with GSe and Factset Consensus. [..] Reiterate Buy on strong premium coffee in-home consumption trend and competitive advantage in premium brand and product.
Yesterday, the broker retained its buy rating and lifted its price target to $24.70.
TechnologyOne Ltd (ASX: TNE)
Another ASX share that is growing strongly is TechnologyOne.
It is an enterprise software provider to the government, local government, financial services, health & community services, education, and utilities and managed services markets.
Its software covers financials, HR & Payroll, supply chain, and business intelligence. In addition, the company offers custom software development services for large scale, purpose built applications.
Analysts at Bell Potter are very positive on the company thanks to its shift of focus. Instead of a licence model, the company is now focusing on a software-as-a-service model that generates recurring revenues from its customers.
Pleasingly, this shift is going well and Bell Potter expects this to continue to be the case and underpin further strong growth and margin expansion in the coming years. The broker commented:
The migration [to a fully integrated SaaS solution] is now around three quarters complete and Technology One is starting to reap the benefits of greater recurring revenue and a higher margin. This combination will in our view drive double digit earnings growth for years to come and, as the migration of customers approaches 100%, we expect the multiple to rerate to that of a pure SaaS company.
Bell Potter has a buy rating and and $14.25 price target on the company's shares.
