Out of share ideas? Here are three ASX growth shares that I think are looking tempting at current levels.
Altium
Printed circuit board (PCB) software provider Altium Limited (ASX: ALU) is looking much better value at these levels in my view.
Altium is a stock that’s typically been priced for growth, but its latest results unfortunately weren’t enough to maintain its fairly lofty valuation. Additionally, the recent threat of rising bond yields puts companies like Altium in the crosshairs, which has further contributed to this recent downtrend.
I’m happy to look past those factors for now and put some faith in management to execute its long-term growth strategy involving its Altium 365 platform.
If it plays out well, I think there’s an opportunity for some nice network effects and an extremely scalable product.
If you’re interested in learning more about Altium, check out this article: Will ASX tech stocks crash in 2021? Here’s one ASX share I’d buy if they did.
Xero
Also currently trading at more attractive levels is accounting software provider Xero Limited (ASX: XRO).
Similar to Altium, Xero is an extremely high-quality company with excellent unit economics, powerful network effects and a highly regarded product offering within the accounting profession.
There seems to still be a fairly large growth runway in overseas markets where Xero doesn’t have much exposure. Its most recent acquisition of Planday appears to be a step in the right direction, allowing Xero to expand into new geographic regions and continue to build out its app ecosystem for cross-selling opportunities.
A potential reopening play might also catapult Xero’s success in the coming years as new businesses emerge from COVID-19 recessions, resulting in an increased demand for business services.
For more reading on Xero, click here to read: Down 28% in 3 months, Are Xero shares in bargain territory?.
Tyro Payments
On the topic of reopening plays, Tyro Payments Ltd (ASX: TYR) is another potential beneficiary of an economic recovery with an additional boost from a shift to cashless transactions.
The EFTPOS terminal market is a large opportunity in Australia, with roughly one million active terminals in use. The incumbent big four banks are estimated to have around 95% of the market share, so if Tyro can offer a better product with more attractive rates, the upside potential could be significant.
Tyro’s recent terminal connectivity issue is an unfortunate example of what can go wrong in this industry, resulting in lost customers and a damaged reputation.
It might take some for Tyro to rebuild trust with its customers, but nonetheless, I think it’s one to add to your watchlist for now. For my latest take on Tyro, check out this article: Are Tyro shares back in the good books?.
