The two ASX growth shares in this article could be the way to go according to some of the leading analysts in Australia.
These are businesses that are growing revenue quickly, have growing profit margins and have long-term growth planned. They are utilising digital business models to serve their customers and consumers.
Here are two ASX growth shares liked by experts:
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Airtasker Ltd (ASX: ART)
Airtasker is currently rated as a buy by the broker Morgans, with a price target of $1.25. That suggests a potential doubling of the Airtasker share price over the next 12 months.
What does Airtasker do? It provides a platform that connects people or businesses that want work doing with people willing to do that work (for a fee). Airtasker takes a small cut of that transaction value.
The gross marketplace volume (GMV) of Airtasker is growing at a double-digit rate. Despite lockdowns in its two major markets of Sydney and Melbourne during the first half of FY22, Airtasker saw GMV increase by 15.5% year on year to $83.6 million.
After the lockdowns ended, Airtasker saw a "strong rebound" in the second quarter with GMV up 39% quarter on quarter to $48.6 million. It managed to achieve a record weekly GMV run rate of $4.5 million in December 2021.
It has a very high gross profit margin of 93%.
Not only is the number of tasks increasing on the ASX growth share's platform, but the average task price is also going up. In December, the average task price reached $255 (up 24% year on year).
But the company is also targeting the much larger markets of the US and UK. In Australia, Airtasker says it has achieved a market share of 0.3% for the local service industries. If it achieved the same 0.3% market share in the UK and USA, that would translate to annual GMV of $210 million and $1.5 billion, respectively.
In the second quarter of FY22, Airtasker said task growth was 71% quarter on quarter in the US. Turning to the UK, second-quarter GMV grew by 121% year on year.
Adore Beauty Group Ltd (ASX: ABY)
Adore Beauty is currently rated as a buy by Morgan Stanley, with a price target of $4. That implies a potential doubling of the Adore Beauty share price over the next year.
This ASX growth share is the leading e-commerce platform for beauty products in Australia. It sells almost 12,000 products from over 270 brands.
The company has pointed out many times that it continues to benefit from the structural shift to online shopping. It is also seeing new customer growth, high levels of retention and growing brand awareness. All of these factors "strongly positions the company for future growth".
Adore Beauty continues to see double-digit revenue growth. In the first half of FY22, revenue rose 18% to $113.1 million. Active customers rose 13%, whilst returning customers increased 56%. Annual revenue per active customer increased 5% year on year to $224.
The gross profit margin was 33.1%, an increase of 0.6 percentage points thanks to product margin expansion and brand funding.
The company is planning on launching its first private label brand. It's also working on other priorities including its mobile app, loyalty and adjacency expansion. This ASX growth share operates in an $11 billion sector that is growing, and Adore Beauty is growing its market share within that.
In the first six weeks of the second half of FY22, it said that revenue had grown by another 14%.
