Are these 2 compelling ASX growth shares buys in April 2022?

These two ASX growth shares both expect future growth.

| More on:
a woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Here are 2 ASX shares that are demonstrating growth
  • Bailador is a tech investor with a portfolio of investments that are achieving quick revenue growth
  • Bubs is an infant formula business that is expanding its product portfolio and growing revenue quickly

Some leading ASX growth shares could be worth considering in April 2022.

There has been significant volatility on the ASX share market since the start of the year. But sometimes, the ups and downs of the stock market can open up opportunities.

With that in mind, here are two possible contenders that have compelling growth potential:

Bailador Technology Investments Ltd (ASX: BTI)

Bailador describes itself as a technology expansion capital fund. It says it provides investors with exposure to “expansion-stage” technology companies at attractive valuations before going public and listing on a stock exchange.

Some of its previous investments have been Lendi, Siteminder Ltd (ASX: SDR), and Straker Translations Ltd (ASX: STG).

The Bailador share price has fallen by almost 20% since the start of the year. But the company can point to several financial metrics that show the strength of the underlying businesses.

In December 2021, the ASX growth share had 10 investments which had 43% revenue growth for the 12 months to December 2021, or 81% revenue growth excluding travel. Around 91% of the revenue is recurring. Those investments had a gross profit margin of about 66%.

Despite the pain that technology businesses have experienced on the share market, Bailador has continued to report gains.

It has entered into an agreement to sell its investment in Standard Media Index for $20 million, representing an uplift of approximately 67% to the carrying value. This valuation uplift represented an $8 million increase.

Bailador also recently completed an additional $7.7 million investment in InstantScripts, a digital healthcare platform that enables Australians to conveniently access high-quality doctor care and routine prescription medication. It saw 109% revenue growth in the three months to January 2022. The valuation of the investment round resulted in a 15% uplift to the valuation of Bailador’s existing investment in InstantScripts.

Bubs Australia Ltd (ASX: BUB)

Bubs is an Australian infant formula business that specialises in goat milk products. The company claims to be the fastest-growing infant formula manufacturer in Australia.

In its recent FY22 half-year result, it reported several achievements. It said that it achieved positive earnings before interest, tax, depreciation and amortisation (EBITDA) for the first time, with positive cash flow in the half (and both quarters being cash flow positive).

It doubled its infant formula sales, which helped “significant” gross profit margin improvement. Bubs saw “strong” growth in domestic retail scan sales with market share gains. Corporate daigou sales were also at a record high.

The ASX growth share has also launched ‘Bubs Supreme’ featuring A2 beta-casein protein milk, with ranging secured in 500 Coles Group Ltd (ASX: COL) supermarkets nationally. It will be on the shelves from May 2022.

Corporate daigou partner Willis Trading has made an opening purchase order of $32.9 million. This will be delivered in the fourth quarter of FY22 and the first quarter of FY23.

Bubs boasts that it now has a presence across all key premium segments: goat, organic, and A2 beta-casein protein.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Bailador Technology Investments Limited and SiteMinder Limited. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended BUBS AUST FPO, Bailador Technology Investments Limited, and Straker Translations. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Young female investor holding cash ASX retail capital return
How to invest

Why I think these two ASX shares could turn $5,000 into $100,000

Here are two ASX shares that I believe could generate big returns for investors.

Read more »

Person pointing finger on on an increasing graph which represents a rising share price.
Technology Shares

Why is the BrainChip share price gaining 5% on Friday?

Why are BrainChip shares on fire this Friday?

Read more »

A girl runs along with her kite flying high in the sky.
Technology Shares

This small-cap ASX share is soaring 33% on strategic partnership news

LiveHire shares are set to finish Friday on a high note.

Read more »

Businessman in suit and holding a briefcase jumps into the sky celebrating the rising Enero share price
Technology Shares

Why is the Kogan share price jumping 12%?

Kogan's shares are ending the week strongly...

Read more »

a man and a woman sitting in a technology related work environment high five each other while the man wears headphones around his heck and the woman sits in front of a laptop.
Technology Shares

Why ASX 200 tech shares are outperforming the market on Friday

Tech shares on fire today and leading the broader market. Here are the details.

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Technology Shares

What’s boosting the Damstra share price today?

The company has signed a three-year deal with a copper miner. Here are the details.

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Technology Shares

Block share price jumps 9% following Cathie Wood investment

Block's shares are jumping on Friday. Here's why...

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Technology Shares

Why is the Xero share price leaping higher today?

Xero shares are shooting the moon today. What's gotten investors so excited?

Read more »