1 ASX growth stock down 40% to buy right now

Goldman Sachs thinks this beaten down stock could be great value.

| More on:
Happy man working on his laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

IDP Education Ltd (ASX: IEL) shares have been sold off over the last 12 months.

Concerns over the loss of its language testing monopoly in Canada and student visa changes have led to its shares losing almost 40% of their value.

This leaves the ASX growth stock trading within a whisker of its 52-week low of $18.29.

Is this ASX growth stock a buy?

While this decline is disappointing, the team at Goldman Sachs believes that investors should be chomping at the bit to snap up its shares while they're down.

In response to the company's recent half-year results release, the broker has retained its buy rating with a $26.60 price target.

Based on the current IDP Education share price of $18.55, this implies potential upside of 43% for investors over the next 12 months.

In addition, Goldman expects a 46 cents per share dividend in FY 2024. This represents a modest but attractive 2.5% dividend yield, boosting the total potential return beyond 45%.

What did the broker say about IDP Education?

The broker believes that the ASX growth stock is going to be a stronger business when the dust settles on recent industry events.

It then expects IDP Education to go through a period of very strong earnings growth. It explains:

IEL is likely to emerge through this period of short-term regulatory tightening with a more diversified business and stronger SP market position to capitalise on the long-term structural growth in international education, setting up the company for multi-year mid-teens earnings growth. On that basis, the shares represent attractive value, and we reiterate Buy.

All in all, the broker appears to believe it could be a great option for investors that are willing to be patient.

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 Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Growth Shares

These mid-cap ASX shares could rise 20% to 50%

Goldman Sachs is tipping these stocks as buys.

Read more »

A happy boy with his dad dabs like a hero while his father checks his phone.
Growth Shares

2 ASX growth shares that could turn $1,000 into $10,000 by 2034

I think these two stocks have a shot at being 10-baggers.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Growth Shares

These top ASX 200 growth shares can rise 10% to 50%

Analysts see major upside ahead for these buy-rated shares.

Read more »

A young man wearing glasses writes down his stock picks in his living room.
Growth Shares

I think this ASX growth stock has market-beating potential

I'm betting that this investment will crush the ASX over the next few years.

Read more »

A woman shows her phone screen and points up.
Growth Shares

1 ASX 200 stock I'm buying hand over fist despite the market's pessimism

I’ve been building up my position in this compelling stock.

Read more »

A man looking at his laptop and thinking.
Growth Shares

3 beaten down ASX growth shares that could be dirt cheap

Analysts think these shares are too cheap to ignore.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Growth Shares

3 roaring ASX shares to hold for the next 20 years

Analysts at Macquarie believe these market-beaters can continue to deliver.

Read more »

Happy woman on her phone while her electric vehicle charges.
Growth Shares

3 ASX growth shares to supercharge your investment portfolio returns

Analysts have good things to say about these top stocks.

Read more »