3 ASX shares down 70% that could be cheap buys

A 70% share price fall should never be ignored. It usually tells investors that confidence has been badly damaged, expectations have changed, or the market is worried about what comes next.

But heavy falls can also create opportunities.

The three ASX shares in this article are down around 70% over the past 12 months. They are not risk-free, and they may take time to recover. But for patient investors, I think they could be cheap buys.

Accent Group Ltd (ASX: AX1)

Accent Group has had a difficult year as investors worry about consumer spending, margins, and the outlook for discretionary retail.

That is understandable. Footwear and apparel can be pressured when households are watching their budgets closely. Rising interest rates, higher living costs, and weaker confidence can all make shoppers more selective.

But I still think Accent is worth a look after such a large fall.

The company has a strong position in footwear retail, with brands and store formats that reach a wide range of customers. Its portfolio includes well-known banners such as The Athlete’s Foot, Hype DC, Platypus, Skechers, Stylerunner, and Glue Store.

I like the fact that footwear is not just fashion. Many customers still need sports shoes, school shoes, work shoes, and everyday footwear. Demand can move around, but the category does not disappear.

If consumer conditions eventually improve, I think Accent could benefit from operating leverage, stronger sales, and better sentiment toward retail shares.

This is not one I would expect to recover overnight. But after a 70% fall, I think the market may be pricing in a very tough future.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is another ASX share that has been hit hard.

The online furniture and homewares retailer is exposed to several weak spots in the economy. Housing turnover has been uncertain, renovation activity can be uneven, and big-ticket discretionary spending is under pressure.

Those are real challenges. But I think the long-term opportunity is still there.

Furniture and homewares remain a large market, and online penetration still has room to grow over time. More customers are becoming comfortable researching, comparing, and buying bulky items online, especially if the range is broad and prices are competitive.

Temple & Webster also has the benefit of a digital-first model. It does not need the same store network as traditional retailers, which can give it flexibility as it scales.

The share price fall suggests investors are worried about the near-term outlook. I can understand that. But if the company keeps building its brand, improving the customer experience, and growing its market share, I think the current weakness could look attractive in hindsight.

Gentrack Group Ltd (ASX: GTK)

Gentrack is a different type of fallen share. The company provides software for utilities and airports. Its technology helps customers manage areas such as billing, operations, customer information, and industry-specific workflows.

I think that makes Gentrack interesting because it serves sectors that are becoming more complex.

Utilities are dealing with changing energy systems, renewables, grid pressure, customer expectations, and regulation. Airports also need efficient systems as travel demand and operational demands evolve.

That creates demand for modern software. Gentrack is not immune from risk. Software projects can be complicated, customer decisions can take time, and growth expectations can shift quickly. There is also the real threat of artificial intelligence (AI) disruption.

But after a 70% fall, I think patient investors should at least be asking whether the market has become too pessimistic.

Foolish takeaway

Shares do not fall 70% without reason.

These shares each face genuine challenges. Consumer weakness could keep weighing on Accent and Temple & Webster, while Gentrack still needs to prove that its growth story can keep delivering.

But large share price falls can reset expectations. For investors who can handle volatility and think beyond the next few months, these three ASX shares could be cheap buys with meaningful recovery potential.

The post 3 ASX shares down 70% that could be cheap buys appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Gentrack Group and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Gentrack Group. The Motley Fool Australia has recommended Accent Group and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.