While most ASX tech shares have rebounded from their lows, that doesn't mean there aren't any bargains out there.
For example, the two tech shares listed below could have huge upside potential if Goldman Sachs is on the money with its recommendations.
Here's what its analysts are saying about these ASX tech shares:
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Life360 Inc (ASX: 360)
Goldman Sachs currently has a buy rating and $7.90 price target on this location technology company's shares. Based on the current Life360 share price of $4.90, this implies potential upside of 61% over the next 12 months.
The broker believes Life360 is on the verge of becoming a profitable growth machine. Something which it feels the market underappreciates. As a result, it sees significant value in its shares at the current level. It commented:
Life360 is executing well on its pricing strategy as the company moves to a profitable growth model, and we believe management's targets regarding underlying/statutory EBITDA margin expansion should help the market quantify the operating leverage we believe Life360 can generate in coming years. The company is well capitalised, will be cash flow positive from 2Q23, and stands to generate significant earnings growth in coming years; all of which look underappreciated by the market as implied by the current share price.
Readytech Holdings Ltd (ASX: RDY)
Another ASX tech share that Goldman Sachs sees plenty of value in is Readytech. It is a provider of mission-critical software-as-a-service (SaaS) solutions for the education, employment services, workforce management, government and justice sectors.
Goldman currently has a buy rating and $4.40 price target on its shares. Based on the current Readytech share price of $2.95, this suggests potential upside of 49% for investors.
The broker is very positive on Readytech's long term growth potential and its defensive earnings. It said:
RDY remains a tech value play within our coverage universe, trading at a >50% discount to peers when accounting for its robust growth outlook. Government software has been a pocket of strength and resilience within TMT (~3/4 of RDY's earnings) and we are positive on RDY's ability to deliver mid-teens organic growth at an expanding profit margin through the cycle.
