Should you buy Domino's and 2 other beaten down ASX growth shares?

Domino's Pizza Enterprises Ltd (ASX:DMP) shares and two others are trading significantly lower than their 52-week highs. Is this a buying opportunity?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Appen Ltd (ASX: APX) and Pro Medicus Limited (ASX: PME) shares may have been scaling to new heights this month, but not all growth shares are trading at new highs.

Three growth shares that are trading significantly lower than their 52-week highs at present are listed below. Are these shares in the buy zone?

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is one of the world's leading gaming technology companies with a portfolio of incredibly popular pokie machines and a fast-growing digital business. The company's shares have lost 30% of their value since they hit a 52-week high of $33.06 in July, which I think has left them trading at a very attractive level of just 19x estimated forward earnings. I believe this is cheap considering its strong long-term growth potential thanks to its exposure to a digital and social gaming market which is expected to grow at a rapid rate over the next decade.

Costa Group Holdings Ltd (ASX: CGC)

This horticulture company's shares have dropped 41% from their 52-week high. The reason for this selling was the sudden deterioration in trading conditions late last year which led to Costa posting a 2.4% decline in revenue and a 42% decline in EBITDA before SGARA, material items, and amortisation during the six months to December 30. Pleasingly, conditions have improved and Costa has experienced a solid recovery in the price of its produce. As a result, it is confident it will grow earnings by at least 30% in calendar year 2019. At around 23x estimated FY 2019 earnings, I think this makes them fairly priced, but not necessarily cheap.

Domino's Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator's shares are down 29% from their 52-week high. A disappointing half year result in February has largely been to blame for this share price weakness. Whilst its performance was disappointing, I believe it is well worth being patient with the company. After all, Domino's has significant growth potential from its expansion in Europe. It is partly for this reason that Goldman Sachs recently upgraded its shares to a buy rating with a $50.50 price target.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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.

More on Growth Shares

a happy investor with a wide smile points to a graph that shows an upward trending share price
Growth Shares

Here are the top five ASX 200 shares in Macquarie's model growth portfolio

These ASX 200 shares are highly rated by analysts at Macquarie.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
Growth Shares

3 ASX shares to buy in 2024 and hold for the next 10 years

Analysts think these top shares are in the buy zone right now.

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Growth Shares

4 ASX growth shares I think will benefit from interest rate cuts in 2024

Not only will home loan holders rejoice, investors of these stocks could also be yelling with joy when the Reserve…

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
Growth Shares

3 of the best ASX growth shares to buy now

Analysts see plenty of upside for these buy-rated shares.

Read more »

A man and woman in an office look at a laptop and discuss investing, budget strategies or other financial concepts
Growth Shares

Here's why analysts love these buy-rated ASX 200 growth shares

There's a reason analysts are feeling bullish about these companies.

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Growth Shares

Big returns could be coming for high-flying Lovisa shares

Morgans doesn't believe it is too late to snap up this hot stock.

Read more »

Smiling young parents with their daughter dream of success.
Growth Shares

Why these ASX 200 growth shares could be top buys now

Analysts are feeling bullish about these growth stocks. Let’s see what they’re saying.

Read more »

Concept image of a man in a suit with his chest on fire.
Growth Shares

Ignore the noise and buy this hot ASX growth stock

A recent pullback may have created a buying opportunity according to Bell Potter.

Read more »