If you're looking for growth shares to buy, then you may want to check out the two listed below.
Both these ASX growth shares have just been named as buys by analysts. Here's what they are saying:
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Jumbo Interactive Ltd (ASX: JIN)
The first ASX growth share that has been tipped as a buy is online lottery ticket seller Jumbo.
The team at Morgans was impressed with its performance in FY 2022 and highlights that its software as a service (SaaS) business is now a key earnings contributor. This is good news given its significant global market opportunity.
Morgans has put an add rating and $17.50 price target on the company's shares. It commented:
FY22 was a year of solid growth in revenue and earnings for JIN. The business continued to diversify its earnings base, with SaaS now making up nearly half of group EBITDA. There were few surprises in the numbers, given JIN pre-announced headline earnings in July. We have made no material changes to our earnings estimates.
Our NPAT estimates are effectively unchanged in both FY23 and FY24, although we raise our EPS forecasts by 1% in each year as a result of the proposed $25m buyback. We reiterate our ADD rating. We expect JIN to continue to achieve steady growth in the years ahead through a combination of organic contract wins, M&A and diversification.
Nitro Software Ltd (ASX: NTO)
Another ASX growth share that has just been named as a buy is this document productivity software provider.
Goldman Sachs was pleased with Nitro's performance during the first half and believes it is making good progress with its cost cutting plan. And while its growth is no longer expected to be as quick as first thought, the broker sees plenty of value in its shares at the current level.
In fact, it feels Nitro's shares are materially undervalued based on its global growth opportunity. As a result, the broker has retained its buy rating and $2.05 price target on the company's shares. It commented:
NTO's growth outlook has been re-based post the 2Q22 update (from 30-40% to 20-30%) and we see the company as on a credible path to cash flow breakeven; however, consecutive quarters of strong ARR performance are likely necessary to ease concerns over execution challenges. We are comfortable with NTO's full-year ARR guidance based on typical seasonality (2H weighted) and Connective cross-sell, with an update expected at the 3Q22 result in October.
We continue to see NTO as an undervalued global growth opportunity (>20% FY22-25E ARR CAGR) with high gross margins (~90%), a sound balance sheet (US$35mn net cash) and very little priced into the current valuation at 2x FY23 EV/ARR (an all-time low). Our 12-mth TP of A$2.05/share is unchanged and we reiterate Buy.
