A few ASX shares are growing really rapidly, which may mean that they’re worth looking at.
Businesses that are increasing the revenue and profit at a very fast pace may be able to deliver good shareholders.
Technology businesses in-particular are growing at a very fast rate in reaction to some COVID-19 impacts.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is one of the ASX shares that have seen the most growth over the last year after the COVID-19 crash.
Over the last year the Temple & Webster share price has risen 342%. The ASX retail share has benefited from the high level of interest from shoppers in digital channels.
In the Temple & Webster half-year report, it revealed that active customers more than doubled to 678,000. Not only that, but revenue per active customer increased by 6% to $401 due to a higher level of repeat buying.
Not only is Temple & Webster increasing its marketing spending as it gets bigger, but its conversion rate is also improving along with a higher customer satisfaction rate. It has done a number of things to make things better for customers including: better range and quality, it doubled capacity in the ‘care team’, added more carriers for bulky delivery, invested in data integration for self-service and AI-assisted help, and it’s working with logistics partners in peak periods.
Temple & Webster generated revenue growth of 118% to $161.6 million and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 556%.
The company shared some reasons why investors should be interested in the business. The ASX share said it’s the leading pure play online retailer for furniture and homewares in Australia. It has a large addressable market with accelerating online adoption. Finally, Temple & Webster says it’s profitable with strong top-line growth and a debt free balance sheet.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an ASX share that has benefited from a rapid shift to digital payments over the last 12 months.
The tech business provides tools and services so that churches can manage their donations and connect with their congregations. One benefit of Pushpay’s offering is that it has a livestreaming function.
Pushpay’s FY21 interim result included a number of strong growth statistics including 203% growth of operating cashflow to US$27 million and earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) growth of 177% to US$26.7 million.
The combined offering of Pushpay and Church Community Builder, called ChurchStaq, is proving to be popular with churches and may help increase the stickiness of those clients as they’re getting all the benefits that Pushpay has to offer.
The ASX share continues to boast of increasing operating leverage and this was shown in January 2021 when it increased its EBITDAF guidance for FY21 once again with the forecast range now US$56 million to US$60 million. Processing volume over the month of December 2020 was slightly higher than the company’s internal forecast.
Will Pushpay’s profit margins keep rising? Pushpay said it expects operating leverage to continue to accrue to the business over the rest of FY21.
The Pushpay share price is valued at 22x FY23’s estimated earnings according to Commsec.