It's been a bruising start to 2026 for many ASX growth shares, with some among the biggest victims of this year's market onslaught.
Two names that stand out are Mesoblast Ltd (ASX: MSB) and Zip Co Ltd (ASX: ZIP). At the time of writing, Mesoblast shares are down 23% year to date to $2.08, while Zip has plunged 52% to $1.48.
By comparison the S&P/ASX 200 Index (ASX: XJO) has shed 2.5% of its value so far this year.
But after such steep declines for both ASX growth shares, could this be a classic buy the dip opportunity?
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Mesoblast: High risk, high reward
This ASX growth share is no stranger to volatility, with its share price often swinging sharply on clinical updates and regulatory news.
The recent pullback reflects ongoing uncertainty around approvals and commercialisation timelines. They tend to weigh heavily on sentiment in the biotech sector.
That said, the company has a late-stage pipeline targeting inflammatory diseases, offering significant upside if key treatments are approved. Success could unlock major revenue opportunities and transform the business.
The biotech company has the potential for strong growth this year. Product adoption is increasing and the business is well funded to support its next phase of expansion.
Commercial momentum is also improving. The latest quarterly update showed US$30 million in net revenue, supported by rising demand for its therapy Ryoncil in the United States.
Of course, the risks are substantial — delays, setbacks, or funding pressures could hit the share price hard.
Even so, analysts remain optimistic on the ASX growth share, with an average 12-month price target of $4.23. This implies upside of around 104% from current levels.
Zip: Turnaround story gaining traction?
Zip, on the other hand, has been caught in a broader sell-off across the buy now, pay later space.
Rising interest rates, regulatory scrutiny, and concerns about consumer spending have all contributed to the sharp decline of the ASX growth share.
However, the company has been working to reposition itself, focusing on cost discipline and profitability, particularly in its core US market. If it can sustain margins while stabilising growth, the business could re-rate meaningfully.
The key risks remain tied to economic conditions and credit quality, as any deterioration could impact performance.
Still, analysts are strikingly bullish, with an average price target of $4.21, suggesting potential upside of around 183%.
Foolish Takeaway
Both Mesoblast and Zip highlight the trade-off at the heart of growth investing: elevated risk in exchange for potentially outsized returns.
After significant share price declines, they may be worth a closer look for investors willing to ride the volatility.
