2 top ASX growth stocks that could be bought on October 28, 2021
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There are a number of ASX growth stocks that have seen a high level of development over the past two years.
Not all businesses have seen their revenue increase since the onset of COVID-19. The ASX travel sector saw a reduction in volume.
However, some companies expect significant growth in the coming years:
This is an e-commerce business that sells a variety of items with unique artist designs, such as phone cases, clothing, bags, wall art, etc. Redbubble donates a portion of its gross income to the artist who made the design.
There has been a boom in e-commerce demand over the past couple of years. On top of that, Redbubble has generated millions of dollars in revenue from the masks. This is unlikely to happen again in FY22, so management is hopeful that FY22 earnings will be similar to the underlying FY21 earnings (which excludes masks).
ASX Growth Share thinks it operates in an industry with a huge addressable market (roughly $ 300 billion US) – people can put designs on a parcel of different products.
To take advantage of this huge opportunity, Redbubble plans to invest heavily to attract new customers and new artists, retain existing customers and artists, become more efficient and profitable.
Redbubble is targeting $ 1.25 billion in annual revenue in the market (after paying artists) over the next few years. Its profit margins should be low during this period of heavy investment.
The broker is currently pricing the Redbubble stock as a buy, with a price target of $ 6.50.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay says it’s the primary resource for church growth, engagement, and governance that helps facilitate generosity and participation. He also says technology is a key element in unleashing the bounty of an evolving generation.
The company has continued to expand its offering available to customers with acquisitions, such as Church Community Builder and Resi Media. This has increased its revenue diversification and market share, giving it better tools in church management and video streaming.
The growth share of ASX continues to increase in size. Operating revenues increased 40% to US $ 179.1 million.
Pushpay claims to have embraced the best software tools and scalable processes early on in its development. Combined with “strong financial discipline”, management believes these investments will provide “significant” operating leverage as revenues increase.
Growing profit margins were demonstrated in the result for fiscal year 21. The gross profit margin increased from 65% to 68%. The profit margin before interest, taxes, depreciation, amortization and currencies (EBITDAF) improved from 22% to 34% over the year.
But Pushpay has more growth plans over the next few years. The company said:
In the long term, Pushpay aims to increase the attractiveness of our products to new customers and to increase revenue per customer through continuous innovation and mergers and acquisitions.
The Catholic Initiative is our first step in investing to grow our customer base outside of our existing customer base and we have set ourselves the goal of acquiring over 25% of the Catholic Church and Church Management Systems market. donor management systems over the next five years.