We’re already into the third month of 2021 and there are still plenty of potential ASX share opportunities.
Share prices of businesses are always changing and sometimes this can present value for investors to grab.
Not every business is experiencing growth right now, but some companies have been seeing growing customer activity in recent months:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an ASX share that offers a variety of tools for US churches to manage their operations. One of the key components of the company is a donation payment service where Pushpay processes money on behalf on the churches and takes a small cut.
In the report for the six months to 30 September 2020, it processed US$3.2 billion. This was an increase of 48%, or $1 billion, from the prior corresponding period.
Pushpay says that it expects continued growth in its total processing volume by a larger proportion of new medium and large customers, further development of its products to result in higher adoption and usage, and increased adoption of digital giving.
The ASX share grew its net profit after tax (NPAT) by triple digits in the most recently reported result, with NPAT rising 107% to US$27 million.
Pushpay has increased its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) guidance a few times over the last 12 months. The company views this as a useful metric to judge its operating performance.
Before the company’s annual general meeting (AGM), the EBITDAF guidance was for a range of between US$48 million to US$52 million. Since then, the company has raised its guidance to US$56 million to US$60 million. This came after donation volumes were better than expected in December 2020.
Pushpay said that it expects operating leverage to continue to accrue to the company over the second half of the financial year.
Using Commsec estimates, the Pushpay share price is valued at 22x FY23’s estimated earnings.
Bubs Australia Ltd (ASX: BUB)
The ASX share revealed that things are turning round. Bubs founder and CEO Kristy Carr said:
The external forces brought on by the COVID-19 pandemic led to extensive channel disruption and supply and demand volatility across our sector in 2020.
While not immune to these factors, Bubs’ strong foundations, organisational agility and resilient business model delivered solid turnaround momentum with quarter on quarter sales growth following the major COVID-19 driven disruption to the daigou channel.
There were two particular areas of growth in the result that Bubs wanted to bring to the attention of investors.
It said that Bubs was the fastest growing infant formula manufacturer across Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Chemist Warehouse. It tripled its market share with combined retail scan sales at the checkout up 55% in the first half of FY21 compared to the prior corresponding period.
Another thing that the ASX share pointed investors to was that its goat infant formula gross revenue to China increased by 36% during the period, which offset unforeseen disruption to the daigou channel.
What does Mrs Carr think about the outlook? She said:
Although the first half was challenging and resulted in group gross margin pressure as we rebalanced our inventory position, we have a robust plan in place to focus on core goat dairy profit drivers working alongside our strategic partners, including supporting our daigou channel partners to maximise the opportunity for Bubs as a lead challenger brand in the infant formula category from the recovery.
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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 BUBS AUST FPO and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended BUBS AUST FPO and PUSHPAY FPO NZX. 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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