Every growth investor should want to know about the two ASX shares in this article.
A decade ago, some of the ASX’s current blue chip ASX growth shares were much smaller and have gone through a long growth journey to get to where they are now. Names like REA Group Limited (ASX: REA) and Xero Limited (ASX: XRO) have come a long way in the last several years.
Not many ASX shares will have the same success as the two above-mentioned companies. But there are smaller ones that could keep growing internationally for many years to come:
Airtasker Ltd (ASX: ART)
Airtasker describes itself as Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. The company wants to give people very flexible opportunities to work and earn income. Since 2012, it has served more than 1.2 million unique paying customers.
The ASX share is seeing rapid growth and recently upgraded its guidance.
In the second quarter of FY22, gross marketplace volume (GMV) went up 39% quarter on quarter to $48.6 million. Quarterly revenue increased 37.5% quarter on quarter to $8.1 million.
The UK and US are much larger addressable markets than Australia, which is where the business is expanding. UK GMV was up 121% year on year and US task growth was up 71% quarter on quarter. In the US, it’s focused on four key cities – Atlanta, Kansas City, Dallas and Miami.
Second half guidance was upgraded 4.8% by the ASX growth share from $105 million to $110 million due to the underlying GMV growth trajectory and a “clear outlook” on no further lockdowns.
Airtasker achieved a record weekly GMV run rate of $4.5 million in December. ‘Customer acquisition’ was up 8.9% in December. The average task price in the second quarter increased to $255 (up 24% year on year).
The business has a high gross profit margin, which helps cash flow and profitability, allowing it to re-invest heavily for growth.
Morgans rates it as a buy with a price target of $1.27. It thinks that it has long-term growth in Australia and internationally.
Volpara Health Technologies Ltd (ASX: VHT)
The Volpara share price has dropped 26% since the start of the year. But it keeps growing operationally.
Volpara describes itself as a software company that provides clinical functions for screening clinics, providing feedback on breast density, compression, dose and quality. Its enterprise-wide practice-management software helps with productivity, compliance, reimbursement and patient tracking.
The ASX growth share’s revenue and cash flow are rising quickly as it’s benefiting from winning clients and organic average revenue per user (ARPU) growth.
For example, in the latest quarter, for the three months to 31 December 2021, subscription-based receipts rose by 51% year on year. The company says it’s on track to meet revenue guidance for the year of NZ$25 million.
Annual recurring revenue (ARR) has reached NZ$30.4 million, which is rising every quarter.
The company now has a market share of 35% of US women being screened, up from 34% in the prior quarter.
Growing ARPU remains a key strategy for the business. It can offer multiple products/upsell to existing clients. ARPU at the end of the latest quarter across the entire installed base was US$1.47. The average ARPU for deals in the third quarter was US$1.65. Client churn remains low.
Growth can also come from winning larger networks of hospitals offering a wide range of services.
Volpara also has a very high gross profit margin, which is helping profitability as the business invests for growth. It is expanding into lung cancer screening as well.
Management are expecting an announcement from the FDA about breast density. The ASX share is also awaiting further clinical trial results, as well as regulatory clearances.
The post 2 ASX shares every growth investor needs to know about appeared first on The Motley Fool Australia.
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More reading
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- Why the Airtasker (ASX:ART) share price is rocketing 17% higher today
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended VOLPARA FPO NZ and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ and Xero. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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