2 fantastic ASX shares with enormous growth potential

Here’s why IDP Education Ltd (ASX:IEL) and this ASX growth share could be fantastic options for investors this month…

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If you have a penchant for growth shares, then I have good news for you. The Australian share market is home to a good number of companies growing their earnings at a quick rate.

Two ASX growth shares that could be worth a closer look are listed below. Here’s what you need to know about them:

IDP Education Ltd (ASX: IEL)

The first ASX growth share to look at is this international student placement and English language testing services provider.

The COVID-19 pandemic hit the company very hard for obvious reasons. For example, during the first half of FY 2021, the company posted a 29% decline in revenue to $269 million and a 46% decline in EBIT to $47.3 million.

However, these numbers don’t tell the whole story. IDP Education’s performance improved greatly as the half progressed. So much so, its testing volumes had actually risen close to pre-pandemic levels by the end of the period. And while the terrible situation in India will be a step backwards, it should rebound quickly once the crisis is controlled.

Looking ahead, the company appears to be in a strong position to win a greater share of the market when the pandemic passes. This is due to its software investments and the fact that many of its smaller rivals haven’t fared as well during the crisis.

Morgan Stanley is a fan of the company. It currently has an overweight rating and $30.00 price target on its shares. The broker continues to predict a big rebound in its earnings in FY 2022.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX growth share to look at is Pushpay. It is leading donor management and community engagement platform provider for the faith sector. It has been growing at a rapid rate in recent years and continued this positive trend in FY 2021.

For the 12 months ended 31 March, Pushpay delivered operating revenue of US$179.1 million. This was a 40% or US$51.6 million increase on the prior corresponding period.

And thanks to the achievement of further operating leverage, Pushpay reported EBITDAF of US$58.9 million for FY 2021. This was an increase of 133% year on year. It was also in line with its FY 2021 guidance for EBITDAF of between US$56 million and US$60 million, which was upgraded three times during the course of the year.

Looking ahead, the company is expecting its growth to continue in FY 2022. Pushpay expects its operating earnings to grow 12% to 20.5% year on year. Though, this guidance doesn’t include its increased investment to enter the lucrative Catholic church market.

Speaking about the expansion, management said: “The Catholic initiative is our first step in investing to grow our Customer base outside of our existing core Customer base, and we have set the goal of acquiring more than 25% of the Catholic church management system and donor management system market over the next five years.”

Combined with its existing market, this gives it a very long runway for growth over the next decade.

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*Returns as of January 12th 2022

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 Idp Education Pty Ltd and PUSHPAY FPO NZX. The Motley Fool Australia has recommended 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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