August ASX reporting season has just officially wrapped up, and within their FY19 reporting most companies also provide a forecast of what to expect in FY20. Here are five ASX growth shares that have an exceptionally strong FY20 guidance.
1. Electro Optic Systems Ltd (ASX: EOS)
Electro Optic Systems operates in the aerospace and defence markets. In late May, the company announced that it had secured sufficient orders and market momentum to sustain a compounding growth rate of more than 45% beyond 2020. The company released its half-yearly report on 30 August, citing a 62% increase in revenues and 40.8% increase in profit after tax. While the Electro Optic’s share price is up more than 20% in the past month, it still trades at a moderate price-to-earnings (P/E) ratio of 30.
2. Altium Ltd (ASX: ALU)
What makes Altium exciting is not what it is today or its recent FY19 full year results, but its long-term outlook and goal for market dominance. To put things into perspective, Altium delivered a FY19 revenue of US$171.8 million with 43,600 subscribers to its printed circuit board (PCB) designer tool. The company is confident of achieving its 2020 target of US$200 million revenue, 100,000 Altium Designer subscribers before 2025 and an aspirational revenue goal of US$500 million in 2025. If Altium can achieve its goals, it should deliver favourable shareholder returns and cement the company’s position as the global leader in PCB.
3. Audinate Group Ltd (ASX: AD8)
The Audinate share price fell 6% on the day of its full-year report, primarily driven by the company’s eye-watering valuation. However, the company delivered pleasing numbers, with revenue up 34% and EBITDA up 395%. It cited that “Audinate has historically delivered financial year US Dollar revenue growth in the range between 26-31%, and it is anticipated that this trajectory will continue.”
4. Dicker Data Ltd (ASX: DDR)
Dicker Data is a wholesale distributor of computer hardware, software and related products. It announced a half-year revenue growth of 18.7% to $852 million while net profit soared 51.2% to $32 million. The company launched its own financial services product in the form of Dicker Data Financial Services, which will offer monthly payment solutions that can be specifically tailored to suit a customer’s needs. Growth in FY20 and beyond will be driven by a strong business adoption of on-premise, private and public cloud, and the software and hardware needed to support it. There is also a major refresh cycling in 2020 with the end of Microsoft Windows 7 support, which means businesses will need to move to the Windows 10 Operating Systems platform. The company is confident that it will achieve its previous guidance of $51.4 million in pre-tax operating profit for FY19.
5. Dubber Corp Ltd (ASX: DUB)
Dubber is the world’s leading provider of cloud-based call recording and voice AI for telecommunication service providers. The company is going through a hyper growth phase, having delivered a 269% increase in operating revenue, 179% increase in telecommunication customers and 222% increase in active number of users. While Dubber did not provide a detailed FY20 guidance, I believe the company is well equipped to disrupt the existing hardware-based call recording industry and a share to watch for 2020.
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium, AUDINATEGL FPO, and Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended AUDINATEGL FPO. 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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