It has been a crazy year for many ASX shares, some of them have more than doubled over the past 12 months.
COVID-19 effects have impacted different businesses in different ways. Some e-commerce companies have seen surging sales, whilst travel shares have obviously been hit hard.
Which ASX shares have done really well over the last year? Let’s take a look:
Sezzle Inc (ASX: SZL)
Over the last 12 months the Sezzle share price has risen by 331%. That’s a huge run up in just one year.
The company has been generating excellent underlying merchant sales growth.
Sezzle reported that each month in the FY20 fourth quarter represented new records for underlying merchant sales (UMS), active consumers, active merchants and repeat usage.
In the fourth quarter of 2020, UMS rose by 205.4% year on year to US$320.8 million – this represented 40.6% growth quarter on quarter. December’s UMS exceeded November’s UMS by 0.4% with an annualised UMS run rate of US$1.36 billion. I thought the December UMS number is impressive considering November includes the Black Friday to Cyber Monday weekend sales.
Average monthly UMS was US$106.09 million in the fourth quarter, up from US$76.1 million in the third quarter and US$35 million in the fourth quarter of FY19.
There are some key questions with Sezzle – how long can it keep growing at this pace? Is buy now, pay later a fad or will more and more people pay like this forever? What is a fair price for the buy now, pay later sector? I don’t think they’re all going to be enormously successful in ten years.
Sezzle is doing well though, so it could be one to watch even at this elevated price.
Temple & Webster Group Ltd (ASX: TPW)
The Temple & Webster share price has gone up by 329% over the past year.
This is one of the ASX shares benefiting from the huge rise in online shopping.
The online-only furniture and home furnishings business announced at its AGM that in the financial year to date (YTD) from 1 July 2020 to 19 October 2020 it saw revenue grow by 138% compared to the prior corresponding period. October’s revenue growth was still more than 100%
The first quarter of FY21 saw the company generate $8.6 million of EBITDA (EBITDA explained), which was more than the whole of FY20.
Temple & Webster is one of those high-growth, high price businesses. It deserves a higher earnings multiple valuation than the market average because it’s growing quickly. But how much bigger is the question – low interest rates can justify much higher prices at the moment.
Using earnings projections on CommSec, it is valued at 43 times the estimated earnings for the 2023 financial year. It may well be worth today’s price with a long term view, but I think there are other ASX growth shares that are priced better.
Redbubble Ltd (ASX: RBL)
The Redbubble share price has risen by 590% over the last year.
Not only was FY20 a year of big growth, but it continued into FY21.
It revealed that marketplace revenue soared 116% to $147.5 million. Gross profit grew even faster, rising by 149% to $64.5 million. It generated $22.1 million of EBIT in the first quarter, up from an EBIT loss of $1.5 million last year.
Operating cashflow shot up by 166% to $27.1 million, up from $10.2 million in the prior year. The e-commerce business finished with a closing cash balance of $85.4 million.
However, included in the above numbers included a positive adjustment as delivery times have reverted back to more normal levels. Excluding the delivery date adjustment, marketplace revenue grew 98% to $139.3 million, gross profit jumped 118% to $59.6 million and EBIT generated was $17.2 million.
I think all three of the above ASX growth shares are worth watching, but there’s another one with a much more attractive valuation in my opinion – Pushpay Holdings Ltd (ASX: PPH).
