There are a few different ASX shares that could be compelling ideas to look at if investors have some cash ready to invest.
Businesses that are growing their revenue and have long-term growth plans could be worth paying attention to.
Companies in the technology space could be particularly interesting because of their ability to grow quickly and achieve higher profit margins.
Here are two ASX shares to consider:
Redbubble Ltd (ASX: RBL)
Redbubble is an e-commerce business that specialises in selling products with unique designs on them, made by artists. Redbubble pays a portion of its revenue to the artist who created the design. It operates two websites – Redbubble.com and TeePublic.com.
This company delivered marketplace revenue growth of 58% to $553 million over FY21. The growth was 71% in constant currency terms. Gross profit grew even faster, increasing 66% to $223 million (or rising 79% in constant currency terms).
Redbubble says it’s focused on the “tremendous opportunity” it has as a business. The company is aiming to be the world’s largest marketplace for independent artists.
Over the next few years, it’s aiming to reach marketplace revenue of $1.25 billion per year. To do this, it’s going to invest heavily in a few different areas to deliver top line growth and strengthen its competitive position.
There are four strategic areas it’s investing in for growth. First, artist activation and engagement. Second, user acquisition and transaction optimisation. Third, customer understanding, loyalty and brand building. Finally, the product range and third party fulfilment network.
The ASX share said that it’s expecting to return to year on year growth from the second half of FY22, after $57 million of marketplace revenue in FY21 from mask sales which are not likely to be repeated.
It’s currently rated as a buy by the broker Morgans, with a price target of $4.83. The broker believes Redbubble has a lot of growth potential.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is another ASX share that could be worth looking at for the long-term. It’s a business that provides church management software as well as electronic donation processing capabilities.
FY21 was an important year for the company, particularly in the COVID-19 environment. After integrating the Pushpay and Church Community Builder solutions together, it won new customers, capitalised on cross-selling opportunities within its customer base and achieved operational efficiencies across the combined business.
Whilst Pushpay grew operating revenue increased 40% to US$179.1 million, margin improvements also helped propel profit higher too. The gross profit margin improved from 65% to 68% in FY21. The company also saw total operating expenses, as a percentage of operating revenue, improve 11 percentage points, from 47% to 36%.
The ASX share expects “significant operating leverage to accrue” as operating revenue continues to increase, while expense growth remains low. Management explained that it adopted ‘best-in-class’ software tools and scalable processes early in its development.
All of the above helped Pushpay’s net profit rise 95% to US$31.2 million and operating cashflow went up 145% to US$57.6 million.
Pushpay is focused on growing and diversifying where it generates its profit. It’s looking at geographic diversification. But it has announced the acquisition of Resi Media and also wants to expand in the Catholic sector.
According to Commsec, the Pushpay share price is valued at 34x FY22’s estimated earnings.