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3 ASX tech shares to buy for rapid growth

The best place to be invested for the long-term could be technology companies.

Tech businesses have a distinct advantage over other sectors because their products are usually replicable for no additional cost, or at least an immaterial cost.

This means that if you find a tech company growing revenue at a solid pace, a lot of that revenue gets added to the bottom line and results in increasing profit margins.

That’s why these three tech companies could be good buys:

Altium Limited (ASX: ALU) 

Altium is one of the leading tech businesses on the ASX, it develops and sells electronic PCB software, although it’s expanding with other electronics divisions like Octopart.

The company is aligned with the growth of the Internet of Things with plenty of global leaders using Altium’s services such as Google, Amazon, Apple, Disney, Microsoft, Boeing, Lockheed Martin, Tesla, John Deere, Qualcomm, Broadcom and plenty of others.

In FY19 it grew revenue by 23% and net profit by 41%. Free cash flow continues to jump higher as well.

The recent troubles with other WAAAX shares could be presenting a short-term opportunity to buy Altium at a cheaper price.

Redbubble Ltd (ASX: RBL) 

Redbubble operates artist marketplace businesses TeePublic and Redbubble. This morning the company announced an excellent first quarter of FY20 with revenue growth of 43% and gross profit growth of 48%.

It managed to achieve free cash flow of $7.8 million, so it could be at the point where a lot of the new revenue starts falling to the net profit after tax (NPAT) line in FY21 and beyond.

The company needs to keep increasing the number of selling artists and potential buyers to increase the network effects and the amount of recurring business, but it looks to be in a good position to do this.

Pushpay Holdings Ltd (ASX: PPH) 

Pushpay is a donation payment business that makes it easier for people to give to their specified charity.

A lot of the current client base is US-based churches, which have some of the most generous congregations, so Pushpay is being smart by targeting this demographic.

In FY19 the company reached cash flow breakeven and it also generated a positive operating profit.

In FY20 it’s expecting revenue growth of at least 23% and the company recently announced that cost efficiencies have meant profit is expected to be higher than previously thought.

Whilst US churches are its current focus, there are plenty of other sectors that could be good growth spots in the future like education and global not-for-profit charities.

Foolish takeaway

I think each of these businesses have very promising futures. It’s hard to pick a winner. Over the next four months it could be Redbubble that produces the best returns as investors realise its profit growth potential, but Altium has its sights on becoming a global industry leader, so it could be the one to grow the most if it hits its 2025 goals.

Along with the above tech shares, these leading ASX shares could be the best picks for long-term growth.  

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended PUSHPAY FPO NZX and REDBUBBLE 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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