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2 quality mid cap ASX shares with strong growth potential

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One area of the market which is home to a number of quality options for growth investors is the mid cap space.

But with so many to choose from, which ones should you consider buying? Two to consider are as follows:

Adore Beauty Group Limited (ASX: ABY)

The first mid cap ASX share to look at is Adore Beauty. It is a leading online beauty retailer, providing consumers with an engaging beauty shopping experience.

What really sets Adore Beauty apart from other retailers is that it is more than just an online shop. Adore Beauty’s website is also a destination for education and entertainment. As a result, consumers visit its website even when they are not seeking to purchase items.

This and the shift to online shopping has underpinned very strong active customer growth. As of the end of the first half, Adore Beauty’s active customers had grown 82% over the prior corresponding period to almost 800,000.

From these customers, the company generated revenue of $96.2 million during the first half. This was up 85% on the same period last year. Positively, this is still only a fraction of an Australian beauty and personal market currently worth ~$11 billion a year. This gives Adore Beauty a long runway for growth over the next decade and beyond.

UBS is a fan of Adore Beauty. It currently has a buy rating and $6.20 price target on its shares.

Jumbo Interactive (ASX: JIN)

Jumbo Interactive is an online lottery ticket seller that is best-known as the operator of the Oz Lotteries website.

The Oz Lotteries website is currently the biggest generator of revenue for the company. However, this looks likely to change in the future due to the company’s Powered by Jumbo software as a solution (SaaS) business.

This SaaS business is expected to be the key driver of growth over the 2020s and it isn’t hard to see why. This business is well-placed to benefit from the shift online of lotteries globally. Management estimates that it has a US$303 billion global total addressable market, with just ~7% of this market online at the moment.

Morgans is positive on the company. The broker currently has an add rating and $14.78 price target on its shares.

Where to invest $1,000 right now

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited. 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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