11 ASX growth stocks for 2024

Whether you're fundamentals-focused, a keen follower of technical trends, or adopt a combination of the two styles, there are many ways to find investable companies.

With this in mind, I've turned to a model adapted some years ago by Livewire's own Chris Conway, as a way of ranking growth-focused companies.

Using broker research tool Halo, Conway has sifted the ASX to find companies with market caps north of $500 million that score 15% or more across each of the following criteria:

• Projected 1-year sales revenue growth - Growth stocks are characterised by strong sales momentum, which is required to justify their higher-than-market price-to-equity ratios
• Forward 1-year return on equity (ROE) – This reflects a company's ability to generate cash, which is critical for growth stocks, given a lack of cash flow can cripple companies in this phase.
• Forward 1-year EBITDA margin – This provides a snapshot of short-term operational efficiency. It's a popular metric because it ignores the impacts of non-operating factors such as interest expenses, taxes, or intangible assets.

In the following, I delve into the 11 companies Chris Conway's model identified, outlining some of the latest commentary from Livewire contributors and broker ratings. 

Note: The following article is general information only and shouldn’t be considered financial advice. Please consult your financial adviser before making any investment decisions.

Altium (ASX: ALU)

• EBITDA margin: 36.17%
• ROE: 25.64%
• Sales growth: 21.54%

The electrical design software company is likely to be a key ASX-listed beneficiary of the artificial intelligence revolution, a point emphasised recently by ECP Asset Management’s Damon Callaghan.

What the brokers think

• Macquarie upgraded Altium to OUTPERFORM on 20 November, at the same time lifting its price target to $49.70 from $39.10.
• Jefferies downgraded the company to HOLD from buy on 16 November, but analyst Roger Samuel lifted his price target to $47.08 from $44.69.
• CLSA upgraded Altium to BUY from outperform on 8 November, analyst Nick Basile lifting his price target to $46 from $45.

ALU shares closed at $46.91 on Wednesday 13 December.

Clinuvel Pharmaceuticals (ASX: CUV)

• EBITDA margin: 47.31%
• ROE: 18.51%
• Sales growth: 20.4%

A biopharmaceutical firm, this Australian-based company develops drugs for the treatment of genetic and vascular disorders. SCENESSE is its flagship product, a drug that treats erythropoietic protoporphyria, a hereditary disease that causes an intolerance to light.

Some potential governance shortcomings have seen the company feature in the financial press – for the wrong reasons – in recent years. This is perhaps also why it was one of two stocks singled out as promising short positions at the 2022 edition of the Calcutta stock-picking competition.

What the brokers think

• Morgans rates Clinuvel as ADD with a price target of $22, having initiated coverage of the company on 15 November.
• Bell Potter also added coverage of the company, rating it BUY with a price target of $24 as of 5 October.
• Moelis Australia upgraded Clinuvel to BUY from hold on 11 August but cut its price target to $22.05 from $23.21.

Clinuvel shares traded at $16.35 when the market closed on Wednesday 13 December.

Deterra Royalties (ASX: DRR)

• EBITDA margin: 92.52%
• ROE: 187.9%
• Sales growth: 19.4%

The mining royalties company was spun out of Iluka Resources in 2020, with the rare earths producer retaining a 20% stake in the business. Deterra’s primary income-generating asset is a royalty covering the iron ore produced by BHP from the Mining Area C area, located in the Pilbara region of Western Australia.

Deterra recently appeared on Morgan Stanley’s quantitative most-preferred list.

What the brokers think

• UBS upgraded Deterra to NEUTRAL from sell on 6 October, its price target increased to $4.80 from $3.90.
• Macquarie downgraded the company to NEUTRAL from outperform on 28 September, with a price target of $4.80.

Deterra Royalties shares closed at $5.09 on Wednesday 13 December.

Flight Centre Travel Group (ASX: FLT)

• EBITDA margin: 17.77%
• ROE: 16.7%
• Sales growth: 22.09%

It’s probably unsurprising, but FLT was the ASX’s worst-performing stock in calendar 2020, inking a 60% loss for shareholders amid the border closures travel bans, and other COVID-mitigating measures of the time. It has since rebounded strongly, as pointed out in this piece by Livewire’s Chris Conway.

Some of the other highs and lows of Flight Centre’s history were discussed in this recent interview with its founder, Graham Turner.

What the brokers think

• CLSA downgraded Flight Centre to OUTPERFORM from buy on 16 November, cutting its price target to $21 from $26.
• Jefferies upgraded the company to HOLD from underperform on 15 November, leaving its price target at $18.
• Macquarie rates FLT as OUTPERFORM as of 31 August, with a price target of $24.85.

Flight Centre shares closed at $18.70 on Wednesday 13 December.

IPH Ltd (ASX: IPH)

• EBITDA margin: 32.57%
• ROE: 17.57%
• Sales growth: 24.23%

IPH is a holding company for several intellectual property legal services providers that operate across Australia, New Zealand, and Asia.

LSN Capital’s Nick Sladen named the company among several stand-out “efficiently growing” stocks when he appeared on Livewire’s Buy Hold Sell back in August. For several reasons, he tipped the company to deliver EPS growth of around 10% in the next couple of years.

What the brokers think

• Morgans upgraded IPH to ADD from hold on 22 November but reduced its price target to $8.15 from $8.90.
• IPH upgraded IPH to BUY from neutral on 4 October, lifting its price target to $8.75 from $8.65.

IPH shares closed at $6.65 on Wednesday 13 December.

Jumbo Interactive (ASX: JIN)

• EBITDA margin: 45.13%
• ROE: 35.6%
• Sales growth: 24.12%

The reseller of online lotteries operates in Australia through an agreement with government-licensed firm Tatts Group (which itself became part of Tabcorp Holdings in 2017).

It was called out by Tyndall Asset Management portfolio manager James Nguyen back in September, after a better-than-expected full-year earnings result.

Jumbo was also named as a contrarian stock pick by Tribeca Investment Partners’ Jun Bei Liu in June.

What the brokers think

• Taylor Collison analyst Andrew Orbach upgraded Jumbo to OUTPERFORM from hold on 29 August.
• Barrenjoey rates the company as UNDERWEIGHT as of 28 August, with a price target of $14.90.

Jumbo Interactive’s shares closed at $13.25 on Wednesday 13 December.

Lovisa Holdings (ASX: LOV)

• EBITDA margin: 30.8%
• ROE: 93.19%
• Sales growth: 19.03%

An international retailer of lower-cost fashion jewellery, Lovisa was recently cited by QVG Capital’s Chris Prunty as a company he expects to keep growing at a higher rate than the market.

What the brokers think

• Jarden upgraded Lovisa to BUY from overweight, analyst Ed Woodgate lifting his price target to $23.20 from $21.60.
• RBC Capital Markets rates the company as SECTOR PERFORM with a $20 price target.
• Citi rates Lovisa as NEUTRAL as of 25 August, with a $22.30 price target.

Lovisa shares closed at $21.30 on Wednesday 13 December.

Mcmillan Shakespeare (ASX: MMS)

• EBITDA margin: 30.87%
• ROE: 68.35%
• Sales growth: 38.84%

A fleet and salary packaging company, McMillan Shakespeare also screens favourably for its income characteristics, ranking 7th in an earlier list we compiled here. It’s a company that doesn’t attract a lot of attention, which is one of the reasons for the appeal of the space, which is a beneficiary of electric vehicle uptake.

What the brokers think

• CLSA upgraded McMillan Shakespeare to BUY from underperform on 30 October, with a price target of $20.20.
• Citi upgraded MMS to BUY from neutral on 25 October with a price target of $20.70.

MMS shares closed at $16.70 on Wednesday 13 December.

Neuren Pharmaceuticals (ASX: NEU)

EBITDA margin: 79.9%

ROE: 80.8%

Sales growth: 1,581%

One member of the high-risk cohort of earlier-stage biotech firms, Neuren saw its share price take off earlier this year. The US FDA’s approval of its drug saw the firm become the first ever to roll out a successful treatment for the rare neurological disorder Rett Syndrome.

In July, Emanuel Datt named it among a handful of companies he regards as some of the most interesting on the ASX.

What the brokers think

• Bell Potter downgraded Neuren Pharmaceuticals to HOLD from buy on 7 December, analyst Thomas Wakim leaving his price target at $17.50.
• Jefferies rates the company as BUY as of 14 July, with a price target of $16.75.

NEU shares closed at $17.14 on Wednesday 13 December.

Pro Medicus Limited (ASX: PME)

• EBITDA margin: 74.37%
• ROE: 43.97%
• Sales growth: 27.56%

Healthcare imaging software business Pro Medicus has seen its revenue climb from $9 million when it IPO’d 20-plus years ago to just under $125 million in FY23. First Sentier Investors’ Dushko Bajic believes the firm still has plenty of growth ahead.

PME’s strategic execution also ranks highly in a recent round of institutional investor research conducted by MarketMeter, as discussed here by Livewire’s Hans Lee.

What the brokers think

• Wilsons downgraded Pro Medicus to MARKET-WEIGHT on 27 September, but analyst Melissa Benson lifted her price target to $81.20 from $79.73.
• CLSA upgraded PME to OUTPERFORM from sell on the same day, analyst Andrew Paine lifted his price target to $88.80 from $69.
• Morgans rates the company as HOLD with a price target of $66 as of 15 August.

Pro Medicus shares closed at $92.38 on Wednesday 13 December.

PWR Holdings (ASX: PWH)

• EBITDA margin: 33.56%
• ROE: 25.18%
• Sales growth: 17.85%

A small-cap company, PWR Holdings is a global designer, manufacturer, and supplier of technically advanced, high-performance cooling solutions. It was recently mentioned by ECP Asset Management’s Jason Pohl in a discussion about how he finds companies that satisfy his definition of Quality.

What the brokers think

• Bell Potter rates PWR Holdings as HOLD as of 21 August, with a price target of $10.50.
• CLSA rates the company as BUY, analyst Elijah Mayr setting a price target of $11.

PWR Holdings shares closed at $9.85 on Wednesday 13 December.