Times of uncertainty are unsettling to live through. However, they do create very interesting chances to buy discounted ASX growth shares.
Higher interest rates have had a strong impact on the share prices of businesses that are expected to grow a lot in the coming years. That’s because a higher interest rate reduces the value of how much a business is worth today compared to the risk-free return that is available from things like government bonds or term deposits.
We’ve seen lots of updates from ASX shares in the last few weeks. These two were some of the highlights, and make me think the below two ASX growth shares are too good to ignore after hefty declines.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara offers breast screening software that has the optionality to provide patients with risk analysis, to help improve the chance of identifying cancer as early as possible.
At least one of its software products are used on the images of at least 33% of US women who have a breast screening done – it has built a strong market share.
Its update for the three months to 30 September 2022 showed that quarterly cash receipts were NZ$8.8 million, up 23% compared to the same quarter a year ago.
Cash receipts for the first half of FY23 were up 29% to NZ$17.4 million.
This was the second quarter of FY23, and the contracted annual recurring revenue was now NZ$36.6 million, up approximately US$500,000 from the first quarter of FY23.
Software as a service (SaaS) churn remains low, meaning customer loyalty is high.
I like that the ASX growth share is now striving for profitable growth. Revenue continues to grow, while the cost base has “levelled off”. This is good considering the gross profit margin is around 90%.
It also recently attained B Corp certification, which I think is a positive step as it believes that profitable growth goes “hand in hand with an expanded commitment to transformative social and environmental change.”
Airtasker Ltd (ASX: ART)
This ASX growth share offers a platform for ‘taskers’ to bid for and work for people that need a task doing such as handyperson work, accounting, graphic design, almost any task that could be listed.
It’s the type of business where higher volume can largely add to profit because it has already developed the platform. It just needs to grow the number of tasks on its platforms in Australia, the US and UK to end up making a lot of profit.
Airtasker continues to see strong growth.
It recently acquired a competitor in Australia called Oneflare, which has a bigger focus on trades work.
In its first quarter of FY23, being to September 2022, Airtasker’s total revenue was up 80% to $10.5 million compared to the first quarter of FY22. Excluding Oneflare, revenue was up 36% to $8 million.
Total gross marketplace volume (GMV) went up 82% to $63.4 million. Excluding Oneflare, the GMV increased 39% to $48.2 million.
Oneflare’s marketplace performance and integration is “tracking well ahead of expectations”.
I’m excited by how quickly its international division is growing. UK GMV was up 68% year on year, it’s now at an annualised £4.2 million. The US posted tasks went up 4.7x year on year to 13,000.
This business also has a very high gross profit margin (over 90%), which means that it makes a lot of gross profit from the revenue it produces.
I think that Airtasker could become a much bigger business over time, if it can capture some good market share in the US.
