April 2022 could be a great month to buy some promising ASX growth shares.
We all want to buy businesses at better prices. Well, now is a great opportunity to do that.
Rising interest rates will likely impact businesses that have interest as an expense. I’m looking at a business like Zip Co Ltd (ASX: Z1P) as an example of that.
But there are a number of businesses that I think look very good at these current prices, which are lower. These are two ASX growth shares I’d buy:
Airtasker Ltd (ASX: ART)
Since the start of 2022, the Airtasker share price has dropped 26%.
Investors are seemingly worried about the impacts of inflation and interest rates on many different ASX growth shares.
Airtasker could be one of the businesses that are effectively untroubled by inflation. It gets a cut of each task value on its platform, so if task values go up then Airtasker’s gross marketplace volume (GMV) and revenue should also increase. December’s average task price increased 24% year on year to $255. Second quartre GMV jumped 39% quarter on quarter to $48.6 million.
One of the things that I love about Airtasker is its extremely high gross profit margin of more than 90%. That means that most the ASX growth share’s revenue turns into gross profit. With the strong cashflow of its operating model, the company is investing heavily for growth in Australia, the UK and the US.
Airtasker’s revenue and geographic coverage keeps growing, so I think that it has a very long growth runway ahead. Other countries like Canada can be growth opportunities even further into the future.
Xero Limited (ASX: XRO)
Xero is probably one of the highest-quality ASX growth shares around.
It’s a provider of software for cloud accounting services and taxation compliance. It also has a wider ecosystem that users can tap into.
The company is growing its global subscriber base in many different places. Even in Australia, where it has the most subscribers, it saw another 124,000 net subscriber net additions in the FY22 half-year result. Total subscribers jumped 23% to 3 million.
Xero is in a similar position as Airtasker. It has a very high gross profit margin (87.1% in HY22) and it’s re-investing heavily for growth.
The company is benefiting from lengthening subscriber loyalty. In HY22 it said that the lifetime value of its subscriber base was $9.94 billion (which was a 61% increase year on year).
The ASX growth share is also benefiting from an increasing average revenue per user (ARPU), which Xero said increased by 5% to $31.32 in HY22.
