If you're looking for ASX stocks with strong growth potential, then look no further.
Listed below are two ASX growth stocks that analysts at Goldman Sachs are feeling bullish on. Here's why they are tipping them as buys right now:
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Pro Medicus Limited (ASX: PME)
The first ASX growth share that Goldman is bullish on is Pro Medicus. It is a health imaging technology company behind the incredibly popular Visage 7 Enterprise Imaging platform.
Goldman likes the company due to its position as the technology leader in a growth market. It also highlight the company's potential to expand its offering further in the future. It explains:
Our new estimates imply a +26% EBITDA CAGR (FY23-26E), a 'multiple to growth' ratio of 2.4x, which we view as undemanding vs. ASX Healthcare on 1.8x. We view PME as the clear incumbent technology leader in a growth market with low-risk market share upside from c.10% today, and the optionality to broaden/deepen into a platform solution for adjacent/complementary offerings.
Goldman has a buy rating and a $88 price target on the company's shares.
TechnologyOne Ltd (ASX: TNE)
Another ASX growth stock that Goldman rates as buy is enterprise software provider TechnologyOne.
The broker likes TechnologyOne due to its defensive earnings and transition to a software-as-a-service focused business. It said:
We highlight the defensiveness of TNE's core end markets of Local Government (35% of 1H23 ARR) and Education (25%), and the public sector more broadly (>75%), with growing IT spending supported by revenue streams including council rates and government funding. We see TNE's +10-15% FY23E PBT growth guidance as conservative, and believe that TNE can grow PBT >15% p.a. across FY23-25E driven by its strong ARR outlook (+18% FY22-25E CAGR) and modest margin expansion (+220bps FY22-25E).
Goldman Sachs has a buy rating and a $18.30 price target on Technology One's shares.
