Image source: Getty Images
If you’re looking for growth stocks to buy, the two ASX stocks listed below might be worth considering.
Both have been designated as longs by brokers and have significant upside potential. Here is what they say about them:
Domino’s Pizza Enterprises Ltd. (ASX: DMP)
The first ASX growth share that could be in the buy zone is Domino.
It is one of the largest pizza chain operators in the world with a significant presence in the ANZ, European and Asian regions. But the leadership doesn’t stop there. It has set a target of 7,250 stores by 2033, more than double its current footprint.
And although the company is currently going through a tough time, the Morgans team believes investors should be patient and focus on its long-term growth opportunity.
Morgans has an added rating and a $90.00 price target on Domino shares. He commented:
This is an affordable option that has performed well historically, even in times of inflation or slowing economic growth. The engine of DMP’s growth is its ability to deploy new stores all over the world. It added 438 stores to its global network in the year to June 2022, a pace of expansion we expect to accelerate to nearly 600 in FY23. This will bring the total to nearly than 4,000 stores, i.e. four times more over a period of ten years. Over the next ten years, DMP plans to grow organically to reach 7,250 stores in the 13 countries in which it currently operates
Readytech Holdings Ltd (ASX:RDY)
Another ASX growth share to consider is enterprise software provider Readytech.
It has been a strong performer in recent years and delivered the goods again in fiscal 2022. Last month, Readytech disclosed a 16.8% year-over-year increase in revenue to 78, $3 million and a 45.5% increase in underlying EBITDA to $27.5 million.
Goldman Sachs expects more of the same in the future. As a result, he put a buy rating and price target of $4.30 on the company’s stock. Goldman commented:
We are constructive on RDY’s growth outlook given its defensive end-market exposures (Government and Education account for approximately 3/4 of FY23E revenue) and see opportunity for increase margins starting in FY23, thanks to the transition of IT Vision’s on-premises customers to the cloud. in future years (generating a 2-3x increase in ARPU).
RDY remains significantly undervalued compared to its profitable SaaS peers (we estimate a >50% discount on growth-adjusted EV/EBITDA for FY24E) and is building an impressive track record of organic growth execution which, in our view, will result in reassessment over time.