There are some ASX tech shares that are delivering strong growth over the years. They could be worth looking over.
Here are some ideas:
Redbubble Ltd (ASX: RBL)
Redbubble is an online marketplace business for customers to buy artist-produced products from one of two websites – Redbubble.com or TeePublic.com.
The company sells a variety of product lines including apparel, stationery, housewares, bags, wall art, masks and so on.
There has been a large shift to e-commerce over the past 12 months as a result of the global COVID-19 pandemic. Redbubble has been one of the beneficiaries of this trend.
FY20 saw marketplace revenue grow by 36% to $349 million. Gross profit increased by 42% to $134 million. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 141% to $15.3 million and reported EBITDA rose by 358% to $5.1 million. It made $38 million of free cashflow in that year.
The ASX tech share subsequently gave a trading update for the first quarter of FY21. It said that, after a positive delivery adjustment was removed from the figures, marketplace revenue went up 98% to $139.3 million, gross profit grew 118% to $59.6 million and it generated $17.2 million of earnings before interest and tax (EBIT).
At the time of the FY21 first quarter update, Redbubble CEO Martin Hosking said: “The strategic priority for the group now is to ensure we extend the market leadership we have established. We intend to invest in the customer experience to improve loyalty and retention and ensure long-term higher levels of growth. The company has the resources to undertake the anticipated investments and margin structure to ensure it can do so while remaining profitable.”
Joseph Kim from Montgomery Investment Management said: “While Redbubble has clearly been a “stay-at-home” trade, we believe the business has the opportunity to emerge a longer-term structural winner from COVID-19 should it capitalise in the recent spike in user and customer interest as a result of recent lockdown measures.”
Betashares Asia Technology Tigers ETF (ASX: ASIA)
This exchange-traded fund (ETF) is invested in many of Asia’s biggest technology businesses, outside of Japan.
The ASX tech share has a total of 50 holdings, with some of the biggest positions being: Samsung, Taiwan Semiconductor Manufacturing, Tencent, Meituan, Alibaba and JD.com.
Betashares said that due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.
It has an annual management fee of 0.67%. Betashares Asia Technology Tigers ETF has delivered elevated returns over the past year with a net return of 62%. Since the ETF’s inception, it has delivered an average return of 33.5% per annum. Over the past five years, the index that the ETF tracks has delivered a return of 24.6% per annum.
Altium Limited (ASX: ALU)
The Altium share price has dropped by 19.4% over the past month. The electronic PCB software business wants to be the world leader of its industry.
However, the company is currently going through difficulties because of COVID-19 impacts. FY21 first half revenue fell by 3% to US$89.6 million. Within that update, there were a couple of positives. Electronic manufacturing has rebounded with Octopart benefitting from the recovery and achieving 19% revenue growth for the half. Management said that this is a positive leading indicator for PCB design growth that should drive Altium sales in the second half.
The ASX tech share continues to pivot towards the cloud with its Altium 365 product which could unlock other revenue growth avenues for the company.
According to Commsec, the Altium share price is valued at 38x FY23’s estimated earnings.
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Tristan Harrison owns shares of Altium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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