Analysts cite 2 profitable stocks of ASX growth with 40% + growth

If you want to add some growth stocks to your portfolio, then the two listed below may be the best candidates.

Both of these ASX growth stocks are very profitable and they should continue their strong growth for a long time to come.

Here’s what you need to know about them:

ResMed Inc. (ASX: RMD)

The first share of ASX growth to look at is a sleep-focused campaign.

Over the past decade, ResMed has been growing its sales and profits steadily at a high rate thanks to growing demand and a targeted market.

The good news is that the company still has significant development opportunities in the market, and most sleep apnea patients are still undiagnosed. In addition, the company has great capabilities with a digital connected service platform.

Partly because of the latter Morgans is very set on ResMed. It commented:

Although we believe the next few quarters are likely to be volatile as Covid-related fan demand continues to slow and major sleep apnea volumes are gradually increasing, nothing changes our medium- and long-term views that the company remains in a good position as it creates a unique, patient-focused, digital platform with connected services that addresses highlights across the healthcare value chain.

Morgans currently has an additional rating and target price of its stock of $ 40.46. Based on ResMed’s current share price of $ 27.86, this predicts potential growth for investors of 45%.

Another share of ASX growth that could be a quality option for investors is TechnologyOne. It is an enterprise software provider that serves government, financial services, healthcare and utilities, education, and the utilities and managed services markets.

TechnologyOne recently shifted its focus to its ERP solution “Software as a Service” (SaaS), which provides customers with the EnterpriseOne enterprise package as a cloud service.

This shift in attention went well, and the company reported an increase in SaaS’s annual recurring revenue (ARR) of 43% to $ 192.3 million in the first half. But management does not expect to stop there. He reiterated that he expects his annual recurring income (ARR) to reach $ 500 million by fiscal year 2026.

Goldman Sachs analysts suspect that TechnologyOne may even exceed that goal, noting that the risks are only up. It said:

In our view, TNE has good opportunities to achieve its ARR target of A $ 500 million in 26 pounds, and we are more constructive than consensus and market (as follows from TNE’s current share price). Increased SaaS, higher inflation (through CPI contract transfer) and core business growth underlie our ARR estimate of A $ 505 million in 26 pounds, and we believe the risks are reversed with our estimates subject to modest organic growth (~ 10%)).

Goldman has a buying rating and a target share price of $ 14.00. Based on TechnologyOne’s current share price of $ 9.95, this predicts potential growth for investors of 40%.