With around 2,200 companies listed on the ASX, it can be difficult to know where to start when looking for investments. I believe if you're in your 20s, 30s or 40s, a great place to look is within a pool of top quality growth companies. Most people who fall into these age groups are in the working stages of life and don't require a large dividend income, which means they can take advantage of the tax free compounding effect that growth companies can offer over the long term.
With that in mind, I have pulled together a list of 4 ASX growth shares for you to consider.
Audinate Group LTD (ASX: AD8)
Audinate is the leading provider of professional digital audio networking technologies globally. Its Dante platform allows for the distribution of digital media over standard ethernet networks with near zero latency. Since large ethernet networks already exist, the technology saves huge costs and is much more efficient and streamlined than traditional methods, which has proven very popular with end users. This has provided it with huge growth in the past – analysts are keen to see this continue when it reports its 1H20 earnings on Monday. I also still see plenty of room for future growth, with Audinate estimating its share of the audio market at only 7%.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a medical technology company that assists in the early detection of breast cancer through its artificial intelligence (AI) algorithms. The early detection of cancers improves survival rates and reduces treatment costs. Volpara has been growing rapidly with the re-styling of its business into a software-as-a-service (SaaS) model. It has now also seen its technology and services used in 38 countries.
In its most recent update, Volpara reported a strong third quarter. The company grew its cash receipts from customers by a massive 138% compared to the prior corresponding period. Its annual recurring revenue (ARR) was also above the middle of its forecasts with the company increasing its ARR FY20 target from NZ$17.1 million to at least NZ$17.8 million.
Nearmap Ltd (ASX: NEA)
Nearmap is an aerial imaging company with a profitable Australian and New Zealand business and fast growing North American segment. It has also started mapping Canada with a goal of becoming a global leader. Subscription services for its software are purchased by a diverse customer base across utilities, solar, government, insurance and construction.
Nearmap's most recent results disappointed investors with a guidance downgrade and an increase in losses after tax. However, it still saw total subscription revenue grow by 31% over the prior corresponding period with strong growth in Australia and New Zealand and North America, with the huge North American market continuing to be its main growth focus.
Altium Limited (ASX: ALU)
Altium provides PCB design software for entry-level designers to professionals – a space which is seeing rapid growth thanks to the internet of things (IoT). It sells 'sticky' software, with a target to reach 100,000 active subscribers by 2025 – a target which it is fast approaching after recently reporting a 16% increase in its subscriber base to 46,693.
Altium also continued its strong revenue growth, with 1H20 revenue growing 19% over 1H19. Additionally, it has been stealing market share from competitors, growing its share from around 16% in 2014 to roughly 25% today. It has also released new software such as Altium Designer 20 and a cloud platform.
Altium has forecasted to meet the lower end of its full year revenue and margin guidance. This is due to impacts from the coronavirus and under performance from its acquired electronic parts search engine Octopart.
