If you're searching for growth shares to buy, then the tech sector could be a good place to start.
But which tech shares? Listed below are two ASX tech shares that are rated highly by analysts. Here's what they are saying about them:
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Life360 Inc (ASX: 360)
The first ASX tech share to look at is Life360. It is the company behind the world's leading real time, location-sharing app which is used by over 38 million users.
Bell Potter likes the company due to its huge total addressable market and material cross selling opportunities. The broker also sees plenty of ways for the company to leverage and monetise its huge user base. It explained:
Life360 has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents. An example is roadside assistance where Life360 launched a subscription-based product called Driver Protect which disrupted the market and helped enable monetisation of its user base. Other markets Life360 could potentially enter include insurance, item & pet tracking, senior monitoring, home security and/or identity theft.
And while Life360 isn't profitable yet, the broker isn't concerned by this. It highlights that the company is "expected to be operating cash flow positive from 4Q2023 and has more than sufficient cash to fund its operations till then."
Bell Potter has a buy rating and $7.50 price target on the company's shares.
Readytech Holdings Ltd (ASX: RDY)
Another ASX tech share to look at is enterprise software provider Readytech.
The team at Goldman Sachs believe that it could be a tech share to buy right now. This is due to the company's strong position in defensive market verticals such as higher education and local government.
Goldman expects this to allow the company to continue growing organically at a solid rate in the coming years. The broker commented:
In our view, RDY will continue to grow mid-teens organically while making accretive acquisitions (such as IT Vision), with profitability underpinned by solid software metrics including low churn at ~3% and high LTV/CAC.
RDY serves defensive end markets (e.g. higher education, local government) and has high recurring revenue (>85%) which should protect the company's earnings profile in an economic downturn.
Goldman Sachs has a buy rating and $4.60 price target on ReadyTech's shares.
