Goldman Sachs says these ASX growth shares are buys with double-digit upside

These growth shares have been given buy ratings by the broker.

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Looking for an ASX growth share or two to buy? If you are, you may want to look at the two listed below.

Here's why these ASX growth shares are rated highly by Goldman Sachs right now:

TechnologyOne Ltd (ASX: TNE)

This enterprise software provider could be a top option according to the broker.

It believes TechnologyOne is well-positioned to achieve its annual recurring revenue (ARR) target. And with its margins expected to increase, Goldman is forecasting very strong earnings per share growth through to FY 2026. It explains:

In our view, the company is well placed to meet its A$500mn FY26 ARR target through a combination of SaaS flip uplift, net expansion and new customer growth. We see margin expansion resuming from FY24E onwards, which in combination with robust revenue growth should drive a mid-high teens EPS CAGR to FY26E, providing strong earnings visibility. TNE's share price has historically been driven by its strong rate of compound earnings growth underpinned by its leading market position, high R&D investment and defensive public sector end markets.

In light of this, the broker feels that this ASX growth share is trading on very attractive multiples. It adds:

In our view, TNE's current valuation does not account for its above-trend earnings growth outlook, nor the defensiveness of its earnings in a more challenging macro environment. With greater confidence in the medium term revenue/earnings outlook, we see TNE's growth-adjusted multiple discount vs peers as attractive and we believe the shares can outperform. Buy.

Goldman has a buy rating and an $18.05 price target on its shares. This implies a potential upside of over 17%.

Webjet Limited (ASX: WEB)

Another ASX growth share that Goldman Sachs rates as a buy is online travel booking company Webjet.

It likes Webjet due to structural growth opportunities and its belief that the company has exited the pandemic as a significantly stronger business. It explains:

Our Buy thesis on WEB is premised on 1) WEB demonstrating strong cash generation as the market recovers while current valuation continues to be impacted by macro concerns 2) We believe WEB's Bedbanks business offers a structural growth opportunity and expect it to drive scale benefits, underpinned by system changes and ERP upgrades as WEB goes through the recovery cycle. 3) We believe the OTA business is exposed to the right channels with the ongoing shift towards digital bookings likely to aid WEB in growing its TAM as well as market share.

Goldman has a buy rating and a $8.10 price target on its shares. This suggests a potential upside of almost 12%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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