Ignore the noise and buy this hot ASX growth stock

A recent pullback may have created a buying opportunity according to Bell Potter.

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The Cettire Ltd (ASX: CTT) share price is having a positive start to the week.

At the time of writing, the ASX growth stock is up 3% to $4.14.

Why is this ASX growth stock charging higher?

Today's gain appears to have been driven by a broker note out of Bell Potter this morning.

That note reveals that its analysts believe investors should ignore recent reports about bad customer reviews and buy the dip in the Cettire share price.

The broker notes that it has been weighing up the reviews against rivals and believes there's nothing to be concerned about. It explains:

We have revisited Cettire (CTT)'s fulfilment and returns policy including the latest customer reviews in comparison to luxury e-commerce peers since our last assessment in Nov-22. We view overall fulfilment currently in place at CTT as in line with broader complexities associated with cross-border e-commerce as evident to us from discussions with industry specialists.

In terms of CTT's customer reviews with the majority associated with the returns policy, we note that overall ratings have remained relatively unchanged on a much larger base in total reviews in line with the growing size of the business but broadly within the range of its peers. While CTT remains a younger company as compared to luxury e-comm peers, the company continues to prioritise investing into technology solutions & customer service to improve the returns experience related to first time customers.

Decent upside ahead for investors

In light of the above, the broker has reiterated its buy rating and $4.80 price target on the ASX growth stock.

Based on its current share price of $4.14, this implies potential upside of 16% for investors over the next 12 months.

Bell Potter's buy rating is largely based on its belief that Cettire still has a huge growth runway due to its tiny market share. It also likes its low-risk drop-ship inventory model. It concludes:

We think CTT's ability to outperform their peer group far outweighs others given the ~0.9% market share and further supported by the ongoing consolidation in the luxury e-commerce market. We also view CTT's current EBITDA margins ahead of other e-commerce players with minimum risk associated with the drop-ship inventory model. We retain our BUY rating.

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire. 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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