Brokers have been looking for ASX shares that might be worth buying for investors. July 2021 could be the month to find these opportunities.
Some businesses have large growth plans for the long-term. If they're able to achieve those goals, then that could lead to pleasing profit growth.
Here are two ASX shares that might be options:
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FINEOS Corporation Holdings PLC (ASX: FCL)
FINEOS is a global software business that aims to provide modern customer-centric core software to the employee benefits and life, accident and health industry. It says it helps customers move on from outdated legacy administration systems to its purpose-built, software for new business, billing, claims, absence and policy administration, which improves operational efficiency.
It's currently rated as a buy by brokers at Macquarie Group Ltd (ASX: MQG) with a price target of $4.63. That suggests a potential return of around 17% over the next 12 months if Macquarie is right. The broker believes that FINEOS is capable of more winning more contracts over time and continue increasing in size.
FINEOS says that it's expecting organic subscription revenue growth of 30% for FY21, demonstrating "strong and consistent" software as a service (SaaS) revenue growth. Over 70% of its business is cloud-based revenue. The ASX share is expecting to see an acceleration of cloud adoption in FY22 by its ANZ clients.
A couple of months ago it announced the acquisition of Spraoi, which focuses on the employee benefits and life assurance marketplace. FINEOS said the Spraoi machine learning platform leverages carrier data to learn and generate insights, while the portal infrastructure normalises and improves the customer experience for stakeholders across the value chain.
Baby Bunting Group Ltd (ASX: BBN)
Baby Bunting is one of the faster growing ASX retail shares. It sells a wide range of products for babies and toddlers. The business has a national store network of around 60 stores. It has plans to see a network of over 100 stores around Australia.
Morgans is one of the brokers that likes Baby Bunting with a price target of $6.39, which suggests a potential upside of more than 10% over the next 12 months.
The broker is attracted to the profit growth potential of the business, with the addition of New Zealand expansion an attractive idea.
Baby Bunting said in its half-year result that it has assessed the NZ$450 million New Zealand market opportunity. The ASX share is planning to launch a multi-channel retail proposition with the first store anticipated in FY22 as part of a network plan of at least 10 stores.
The company is experiencing profit margins with greater scale and growth of its private label products. Whilst FY21 half-year revenue grew 16.6%, pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew 29.7% and pro forma net profit rose 43.5% to $10.8 million. Total online sales soared 95.9%, making up 19.7% of total sales.
According to Morgans' estimates, the Baby Bunting share price is currently valued at 24x FY22's forecast earnings.
