The recent market selloff has hit growth shares particularly hard.
Concerns around artificial intelligence (AI) disruption, rising interest rates, and global uncertainty have weighed heavily on valuations. However, for long-term investors, these pullbacks can create opportunities to buy high-quality businesses at more attractive prices.
Here are three ASX growth shares that analysts think could be worth considering after the recent weakness.
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Lovisa Holdings Ltd (ASX: LOV)
The first ASX growth share that could rebound strongly is Lovisa.
The fast-fashion jewellery retailer has built a highly scalable global store network, with a simple and repeatable model that continues to perform across different markets. Its ability to roll out new stores quickly and generate strong returns on capital has been a key driver of its success.
Despite what the recent share price weakness might suggest, the company's expansion story remains intact, with significant opportunities to grow its store footprint internationally.
Morgans is positive on its outlook and has a buy rating on Lovisa shares with a $36.80 price target. This implies potential upside of around 60% from current levels.
Megaport Ltd (ASX: MP1)
Another ASX growth share that could be worth a look is Megaport.
The company operates a global software-defined network that enables businesses to connect to cloud providers and data centres with speed and flexibility. As demand for cloud computing and data-intensive applications grows, the need for this type of connectivity continues to increase.
Megaport also recently announced the major acquisition of Latitude that expands its addressable market significantly. Management highlights that the Latitude deal creates "an industry-leading Compute and Network-as-a-Service platform to power high-performance applications and AI workloads globally."
According to Morgans, the company's outlook remains attractive. The broker has a buy rating on its shares with a $16.00 price target, suggesting potential upside of approximately 100%.
Xero Ltd (ASX: XRO)
A final ASX growth share that could rebound strongly is Xero.
The accounting software company provides cloud-based financial tools to small and medium-sized businesses globally.
While sentiment towards software stocks has weakened recently due to AI disruption fears, Xero believes that AI will be supportive and not disruptive to its business. This leaves it well-positioned to continue benefitting from increasing adoption of digital accounting solutions and opportunities to expand its platform with additional services.
UBS is bullish on the company's prospects and has a buy rating with a $174.00 price target. This implies potential upside of around 130% from current levels.
