Growth investors certainly are a lucky bunch! That's because there are a large number of ASX growth shares that have been tipped to grow strongly over the long term.
Two such shares are listed below. Here's why analysts have named them as buys:
Aristocrat Leisure Limited (ASX: ALL)
The first ASX growth share to buy could be Aristocrat Leisure, which is one of the world's leading gaming technology companies.
Goldman Sachs is a fan of the company and has a buy rating and $45.70 price target on its shares. Based on the current Aristocrat share price of $37.50, this suggests potential upside of 22% for investors over the next 12 months.
Goldman is very positive on the company's long term growth outlook. So much so, it has the company on its conviction list. It commented:
ALL's long-term outlook remains strong, and the group remains a key diversified growth investment option. Additionally, ALL also offers the strongest outlook potential return on our large cap consumer segment. We add ALL to our ANZ Conviction List.
Xero Limited (ASX: XRO)
Analysts at Citi are bullish on this cloud accounting platform provider. They currently have a buy rating and $105.70 price target on its shares. Based on the latest Xero share price of $91.87, this implies potential upside of 15% for investors.
Citi was pleased with the company's recent decision to reduce its workforce to cut costs. It has boosted its earnings estimates to reflect this and is now forecasting explosive earnings growth in the coming years. It commented:
Xero's decision to reduce ~15% of its headcount is unsurprising given: i) revenue/EBITDA per headcount has been limited (~1%) over the last two years; and ii) when considering that growth is expected to slow next year due to delays to MTD as well as softer macro conditions. We maintain our Buy rating as we expect Xero to deliver 3-year EBITDA CAGR >35% which reflects revenue growth of ~19%
