There are a number of high-quality ASX growth shares that could be candidates to think about for the coming years.
Businesses that are generating revenue growth also have the potential to translate that into profit growth and potentially shareholder returns.
Here are two leading potential ASX growth shares to think about:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a leading business in the electronic donation space. The main client base is large and medium churches in the US.
The company has already grown to the point where it’s processing billions of dollars of donations. In FY21 it saw total processing volume increase 39% to US$6.9 billion. It also provides church management services.
Pushpay has been using scalable software, which has helped the business benefit from operating leverage. Whilst FY21 revenue increased by 40% to US$179.1 million, the net profit increased 95% to US$31.2 million and operating cashflow soared 145% to US$57.6 million.
COVID-19 has led to Pushpay seeing a clear shift to digital where customers are using mobile technology to communicate with congregations. Digital is playing a crucial role for churches. Pushpay hasn’t seen a meaningful proportion of digital giving revert to non-digital means.
The ASX growth share is expecting more growth as it wins more market share, benefits from digital adoption and expands into the Catholic sector. The Catholic expansion may lead to other growth opportunities such as the education sector.
Pushpay is expecting more operating leverage to accrue and it’s also on the look out for more acquisitions that will improve its offering.
At the current Pushpay share price it’s valued at 28x FY23’s estimated earnings.
Betashares Global Cybersecurity ETF (ASX: HACK)
This is an exchange-traded fund (ETF) that’s sadly benefiting from the rise in cybercrime across the world.
COVID-19 has accelerated the shift for businesses, governments and organisations to move integral data and operations online. That has meant they are more vulnerable to cybercrime, so there has been a steady increase in spending on cyber defences.
The ETF gives exposure to a number of different players in the space, both established businesses and rising stars.
At the last tally, the biggest 10 holdings in the portfolio were: Zscaler, Crowdstrike, Okta, Accenture, Cisco Systems, Cloudflare, Varonis Systems, Fortinet, Splunk and Cyberark Software. In terms of geographic diversification, almost 90% of the portfolio is invested in US shares and only the UK (3.4%) and Israel (3.4%) are the other countries to have an allocation of more than 3%.
In 2022 the global cybersecurity market is expected to reach $223.68 billion and then rise again to $248.26 billion.
Betashares Global Cybersecurity ETF has an annual management fee of 0.67%.
Past performance is not an indicator of future performance, however since inception in August 2016, the ASX growth share has returned an average of 21% per annum.