Last year saw many ASX growth shares turn it around after a period of malaise.
Now, in 2024, the market is looking forward to interest rates stabilising and maybe even a rate cut or two.
The team at ECP Growth Companies Fund recently named a pair of stocks it's backing for outperformance this year:
No need for a capital raise
Virtual network provider Megaport Ltd (ASX: MP1) has already kicked off 2024 in the right way.
"Megaport outperformed in January as the company released their 2Q numbers late in the month," read the ECP memo to clients.
That update was as bullish as ECP analysts predicted, but it was apparent others weren't thinking the same way.
"While the result was in line with our expectations, the positive share price reaction on the day suggested the market was positioned differently.
"Free cash flow increased over the quarter, leading to a significant increase in the cash at bank, further allaying concerns regarding the need for a capital raise."
Even after a sensational 12 months in which the Megaport share price more than doubled, the business had future potential galore for the long-term investor.
"While the opportunity to further monetise their network fabric remains immense, it will take time."
According to CMC Invest, 10 out of 15 analysts currently agree with the ECP team that Megaport is a buy.
'Considerable runway' for these growth shares
Resmed CDI (ASX: RMD) is also off to a flying start this year, rising more than 10%.
The growth stock is now trading more than 30% higher since its September trough.
The ECP team liked what it saw from a business update last month.
"The recent quarterly result was received well by the market as it signified operational leverage and margin improvement.
"Sleep apnoea is still a major problem and an underpenetrated market both in the US and globally, leaving a considerable growth runway available for RedMed."
ResMed currently has almost the whole sleep apnoea device market to itself.
"With other competitors still well behind, we remain positively disposed to the company's future prospects."
Currently, 18 out of 26 analysts surveyed on CMC Invest believe ResMed shares are a buy.
