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There are a few different ASX stocks that might be compelling ideas to consider if investors have cash ready to invest.
Companies that are increasing their income and have long-term growth plans might deserve special attention.
Companies in the tech sector could be of particular interest due to their ability to grow rapidly and achieve higher profit margins.
Here are two ASX actions to consider:
Redbubble is an e-commerce company that specializes in selling products with unique designs, made by artists. Redbubble donates a portion of its income to the artist who created the design. It operates two websites – Redbubble.com and TeePublic.com.
This company recorded market revenue growth of 58% to $ 553 million in fiscal year 21. Growth was 71% at constant exchange rates. Gross margin grew even faster, increasing 66% to $ 223 million (or up 79% in constant currency terms).
Redbubble says it’s focused on the âhuge opportunitiesâ it has as a business. The company aims to become the world’s largest market for independent artists.
Over the next few years, it aims to achieve sales of $ 1.25 billion per year. To do this, it will invest heavily in a few different areas to generate growth in its turnover and strengthen its competitive position.
There are four strategic areas in which it invests for growth. First, the activation and engagement of artists. Second, user acquisition and transaction optimization. Third, customer understanding, loyalty and brand building. Finally, the range of products and the third-party distribution network.
ASX stock said it expects a return to year-over-year growth starting in the second half of fiscal 22, after $ 57 million in market revenue over the course of year 21 from sales of masks that should not be repeated.
It is currently rated as a buy by broker Morgans, with a price target of $ 4.83. The broker believes that Redbubble has great potential for growth.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is another ASX stock that might be worth considering in the long run. It is a company that provides church management software as well as electronic donation processing capabilities.
Fiscal 21 has been an important year for the company, especially in the COVID-19 environment. After integrating Pushpay and Church Community Builder solutions together, she gained new customers, capitalized on cross-selling opportunities within her customer base, and achieved operational efficiencies across the combined business.
As Pushpay increased operating income by 40% to $ 179.1 million, improving margins also helped propel profits up. The gross profit margin improved from 65% to 68% in FY21. The company also saw its total operating expenses, as a percentage of operating revenue, improve by 11 percentage points, from 47% to 36%.
ASX stock expects “significant operating leverage to build up” as operating revenues continue to rise, while expense growth remains weak. Management explained that they adopted the best software tools and scalable processes early on in their development.
All of the above allowed Pushpay’s net profit to increase 95% to US $ 31.2 million and operating cash flow increased 145% to US $ 57.6 million.
Pushpay focuses on growth and diversification where it generates profits. It is about geographic diversification. But he announced the acquisition of Resi Media and also wants to develop in the Catholic sector.
According to Commsec, the Pushpay share price is valued at 34 times the estimated earnings for fiscal year 22.