Market volatility may have shaken confidence in recent weeks, but if you're focused on the long term, this could be a golden opportunity to back high-quality businesses with strong growth potential.
But which ASX 200 growth shares?
A couple that have been attracting bullish calls from top brokers — and offering compelling upside for patient investors, are listed below. Here's why they could be top picks right now:
Goldman Sachs is feeling bullish about Life360, the location technology company behind one of the most widely used family safety apps in the world. With approximately 80 million users globally, the broker believes the company is sitting on a huge untapped monetisation opportunity.
It currently has a buy rating on the ASX 200 growth share with a $27.00 price target. Based on its current share price of $19.70, this implies potential upside of 37% for investors over the next 12 months.
What's driving that conviction? A massive US$12 billion total addressable market (TAM), room to expand internationally, and the potential to increase average revenue per paying user while boosting conversion rates. It commented:
We estimate Life360 is exposed to a US$12bn global TAM with a large opportunity to expand its product suite, grow average revenue per paying circle (ARPPC), increase payer conversion, and lift penetration rates outside of the US. The company has demonstrated its pricing power and is now exploring the latent monetisation opportunity of its >60mn user base via advertising.
The company is now scaling margins and earnings rapidly off a low base, with attractive unit economics and potential structural profitability tailwinds on the horizon from a reduction in effective app store fees. Life360's Subscription business currently trades at a discount to global subscription app peers when adjusting for its superior growth outlook. We see scope for re-rating as Life360 demonstrates operating leverage, ongoing subscription growth and user monetisation via ads.
If you're looking for an ASX 200 growth share in the healthcare space, then Pro Medicus could be one for you. The medical imaging technology leader has become the go-to provider of high-speed, cloud-based viewing software for major hospitals in the United States.
Bell Potter is a big fan of Pro Medicus and has a buy rating and $280.00 price target on its shares. This suggests that they could rise 35% from current levels.
The broker is very positive on its outlook thanks to the key Visage 7 platform, a next-gen enterprise viewer that allows radiologists to access medical images at lightning fast speed. This is a major advantage in time-critical healthcare environments. Bell Potter notes:
Download speed and native 3D imaging capability continue to be the major drivers of Visage uptake with these features driving the downstream productivity gains. Notwithstanding claims to the contrary by independent competitors (Sectra, Intelerad) the streaming capability of the core Visage system continues to underpin speed to view images from remote storage. We do not see this changing in the short term – despite peers having had years to develop a competing technology.
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