I believe Catapult Group International Ltd (ASX: CAT), FlexiGroup Limited (ASX: FXL) and Nextdc Ltd (ASX: NXT) are 3 exciting ASX growth shares to buy and hold for the long term.
In my view, an investment in these ASX growth shares could lead to substantial returns over the long run.
Catapult Group
Due to its market-leading position in sport technology, I believe this is a company to watch. This week, Catapult advised the market it had achieved positive cash flow a year earlier than forecast, largely driven by its subscription-based business model.
Catapult works with 39 sports worldwide, including teams in the National Basketball Association (NBA), Australian Football League (AFL) and National Football League (NFL). The group provides analytics to help elite sports teams assess their performance. Additionally, with sporting competitions around the world restarting, there could be further upside for this growth share.
In the past year, the Catapult share price has increased by an astonishing 46.9% and is currently trading for $1.66 per share.
FlexiGroup
What I like about FlexiGroup is its differentiated strategy in the buy now, pay later (BNPL) space. Through its humm platform, Flexigroup offers a BNPL option for larger purchases such as IVF and fertility services. It also recently signed well known retailers Temple & Webster, Amart Furniture, Snooze and luxury brand Bally, according to its Q4 2020 retailer update.
The company reported strong online growth in Q4 2020, with ecommerce volumes up 315% and total transactions up 447% on the prior corresponding period (pcp). Additionally, last month the business saw a record number of merchants sign up to instore and online.
With substantial funding from undrawn facilities, I think FlexiGroup has the cashflow flexibility to use the funds to grow its business. It is also one of the few BNPL companies delivering a profit. According to its recent February half year result, it generated a cash profit of $34.5 million, up 8% on pcp.
Despite the Flexigroup share price performance being down 21.02% in the past year, it bounced a staggering 247% from its March low of 40 cents to be trading at $1.39 currently.
In addition, I see great potential for this company because of its diversified product ecosystem. Its product lineup includes credit cards and business financing products, as well as BNPL services.
Nextdc
Successful capital raises and demand for data centres both play a big part in why the Nextdc share price has taken off this past year. Additionally, the company has secured several new contracts in the past year to deliver data centres to customers.
Cloud computing is becoming more a part of our lives and this change has enabled businesses to become more efficient. This shift has been further fuelled by the coronavirus pandemic and the associated increase in remote working arrangements across many sectors. As a result, the need for servers to store all this data could drive strong demand for Nextdc now and well into the future. In my view, the data centre business is a growth industry and an investment today could deliver significant returns to investors.
The Nextdc share price has increased 68.44% in the past year. Despite this phenomenal growth, I believe it could have further to run.
Where to invest $1,000 right now
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Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International Ltd and FlexiGroup Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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