Finding ASX shares capable of producing market-beating returns isn't easy, particularly when valuations remain elevated. But some brokers see significant upside in these two growth companies over the next year.
Both Mesoblast Ltd (ASX: MSB) and Zip Co Ltd (ASX: ZIP) have faced different challenges, but analysts believe their growth prospects could translate into substantial share price gains.
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Mesoblast: strong sales growth and a well-funded outlook
The clinical-stage biotech has had a sluggish start to 2026. Mesoblast shares currently trade at $2.34, down 14% year to date but still 10% higher than they were 12 months ago.
The weakness appears to reflect greater investor caution around clinical timelines, alongside some profit-taking following last year's strong rally.
Mesoblast develops and commercialises allogeneic cellular medicines for complex diseases. Some of its products are already in use, while other cell therapies are progressing through late-stage clinical trials.
Its Ryoncil product is gaining traction, while the company remains well funded. Brokers are also optimistic that sales can continue growing strongly in FY27.
TradingView data shows all five analysts covering the ASX shares rate them a strong buy. Their average price target of $4.08 implies potential upside of approximately 75%.
Bell Potter recently said Mesoblast's latest results were broadly in line with expectations. The broker sees continued double-digit growth from Ryoncil, alongside major potential catalysts from Rexlemestrocel in heart failure and chronic lower back pain.
Bell Potter has a buy rating and a $4.45 price target, implying around 90% potential upside.
Zip: US as main attraction
Zip is a fintech providing buy now, pay later and digital payment services to consumers and merchants. Its rapidly expanding US business is the key attraction.
The US accounted for around two-thirds of Zip's revenue in FY26, with total revenue increasing 24.7%. US revenue surged 37.3% in Australian dollar terms and 44.3% in US dollar terms, compared with just 4.6% growth in ANZ.
The US is also driving customer growth. Active US customers rose 9.3% to 4.65 million, while ANZ customers fell 8% to 1.88 million. For FY27, Zip expects US total transaction value to increase by more than 30%.
Importantly, profitability is growing faster than revenue. Cash gross profit increased 26.2% to $642.3 million, while cash operating profit jumped 57.9% to $268.9 million.
Analysts are particularly bullish. TradingView data shows all 13 analysts rate Zip a buy or strong buy. The average $4.52 price target suggests around 72% upside, while the most bullish target of $6.03 implies potential gains of roughly 130%.
UBS recently maintained its buy rating and $4.70 target, implying around 79% upside. Macquarie also has a buy rating, although its $3.50 target is considerably more conservative.
For investors hunting for ASX growth shares, both companies have significant potential, but that potential comes with materially higher risk than established blue-chip stocks.
