If you have a penchant for growth shares and are on the lookout for some big returns, then read on.
That's because the two ASX growth shares listed below have been tipped to rise 20%+ over the next 12 months. Here's what analysts are saying about these shares:
IDP Education Ltd (ASX: IEL)
Analysts at Morgans believe that this language testing and student placement company could be an ASX growth share to buy.
While its growth has been challenged recently due to regulatory changes, the broker believes it is on the cusp of a rebound. This could make it a great share to hold onto for the next few years. It said:
Tighter and uncertain policy settings saw 2H24 IELTs volumes down ~24% HOH. Student Placement was solid (2H flat on pcp), although policy hadn't fully impacted. IEL expects the international student market (new admissions) to be down ~20-25% in FY25. IEL expect to outperform this via meaningful market share gains. We think FY25 is likely to be the trough year for 'student flows', impacted by tighter policies and the associated uncertainty. We expect IEL's earnings to fall ~12%, with some benefits from pricing; market share gains; and solid cost control.
Morgans has an add rating and $18.20 price target on its shares. This implies potential upside of 20% for investors over the next 12 months.
Readytech Holdings Ltd (ASX: RDY)
Over at Goldman Sachs, its analysts think that Readytech could be an ASX growth share to buy.
It is the owner of a portfolio of enterprise software businesses across several market verticals such as higher education and local government.
Goldman Sachs likes Readytech due to its high (and growing) levels of recurring revenue, as well as its very low churn levels. It also believes that its defensive public sector end-markets and mission critical software solutions should protect its earnings in the event of an economic slowdown.
Despite these positives, Goldman notes that Readytech's shares trade at a significant discount to technology peers. It said:
Further to its defensiveness, we believe the market has given RDY little credit for improving its organic profile since listing while the company has maintained solid margins and cash flow. In our view, RDY will continue to grow mid-teens organically, underpinned by solid software metrics such as low churn at ~3% and high LTV/CAC. RDY trades at a large discount to ASX tech peers, both on an absolute and growth-adjusted basis, which we believe is too wide considering RDY's business quality and growth outlook.
The broker currently has a buy rating and $4.25 price target on its shares. This implies potential upside of 48% from current levels.
