A jam-packed earnings season has flung by, and now we’re full swing into spring. Here’s how I would invest $10k into three ASX growth shares that I’m excited about this month, especially after their FY updates.
Afterpay – $4,000
Afterpay Touch Group Ltd (ASX: APT) announced its results two weeks ago and has since seen its share price pop a stellar 41.1%, closing at $33.87 yesterday, although it opened slightly lower this morning at $33.05.
Revenue rose by 115% to $251.6 million thanks to a 140% growth in global underlying sales to $5.2 billion. Afterpay’s active user base also shot up. The company claims to be adding 12,500 customers daily, resulting in a 130% increase in active customers to 5.2 million.
Investors would have been closely watching the results of Afterpay’s UK market entrance, and they were not let down. In just 15 weeks, the company added 200,000 customers, which is a higher volume than in the US, post-launch.
However, one of the most important metrics that has long thwarted Afterpay’s reputation is its late income fee as a percentage of total revenue. This proportion dropped 5.7% lower to 18.7% compared to last year.
It’s no wonder this fintech stock is an ASX favourite which continues to stun markets with its exceptional performance.
Nanosonics – $5,000
Since announcing its FY result last fortnight, Nanosonics Ltd. (ASX:NAN) has charged more than 40% to be trading for $6.82 at the time of writing.
Nanosonics’ full year sales amounted to $84.3 million, which is up a whopping 39% increase year-on-year. It managed to grow its installed base by 18% to 20,930 units across Europe, this includes countries like Spain, Portugal, Switzerland and Israel.
The company also launched trophon2 into North America, Australia and Europe. It further shared positive news regarding its expansion into the Japanese market, as its trophon2 already has regulatory approval as well as a distribution agreement.
Indeed, its 156x price-to-earnings (P/E) multiple may look expensive. But this is the price investors are willing to pay to get a chunk of Nanonsonics’ 137% growth in net profit after tax!
Nextdc – $1,000
Despite somewhat decent results, Nextdc Ltd (ASX: NXT) slumped 5% on its earnings call. Its share price opened at $6.18 this morning, receiving a small boost this week after equity analysts at Macquarie upgraded its share performance to an outperform.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 13% to $85.1 million, and this value is expected to increase to $100–105 million in the 2019–20 FY. This was however, overshadowed by the increase in Nextdc’s losses, which rose from $6.6 million to $9.8 million year-on-year.
The reason I’ve added this data centre operator to my September watchlist is because of its long-term viability. In an increasingly digitalised economy, there is a growing demand for enterprises to offshore data storage and services.
As it takes several years before a data centre reaches optimal utilisation and begins to generate strong margins for Nextdc, this could be a good price to pay before the company begins benefitting from operations in Singapore and Japan.
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Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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.