Experts have named some ASX shares as buys, and April 2022 could be the time to jump on these opportunities.
When a business generates a lot of revenue growth, it could lead to elevated compound growth over time.
Here are two ASX shares that are liked:
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Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is an e-commerce business that sells an extensive range of different homewares and furniture products. It sells more than 200,000 products from hundreds of suppliers.
The business runs a drop-shipping model where products are sent directly to customers by suppliers, which enables faster delivery times and reduces the need to hold inventory, allowing for a more extensive product range.
The ASX share also has a private label range, which is sourced from overseas suppliers.
Temple & Webster is generating growth in numerous ways. In the FY22 first half, revenue increased 46% year-on-year to $235.4 million. Active customers grew 34% to 906,000, and revenue per active customer rose 10%.
According to management, the second half of FY22 started "strongly", with year-on-year growth of 26% for the period of 1 January 2022 to 6 February 2022.
Management said it remains confident that the strategy is resonating with the next generation of shopper and it's well placed to continue to take share in the markets it's operating in.
It is continuing to reinvest its operating leverage where it makes sense to do so, building strategic moats around the core business while investing in new growth horizons.
It's currently rated as a buy by Credit Suisse, with a price target of $13.54. The Temple & Webster share price closed on Thursday at $6.26, suggesting a potential upside of 116%.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara Health Technologies is an ASX healthcare share that offers software for screening clinics providing feedback on breast density, compression, dose, and quality, while its enterprise-wide practice-management software helps with productivity, compliance, reimbursement, and patient tracking.
The business is seeing steady growth in its annual recurring revenue (ARR), which gives the company and investors revenue visibility.
For the three months to 31 December 2021, Volpara added almost US$1.1 million of ARR. The ARR reached US$21.5 million. In that quarter, subscription receipts rose 51% to NZ$6.7 million.
Its market share has now reached more than 35% of US women being screened, up from the prior quarter of 34%. Its software-as-a-service (SaaS) churn/client loss remains low.
The company is looking to upsell more of its products to clients, which could help the average revenue per user (ARPU). ARPU over the installed base was US$1.47 on 31 December 2021, with the average ARPU for deals in the third quarter of US$1.65.
The ASX share is also looking to grow in the lung cancer space. It entered the lung cancer screening world in 2019 when it acquired MRS Systems, with a market share of 8%.
Volpara says that software technology 'stacks' are similar, "except diagnostic tools are more compelling in the lung space due to the complexity of doing lung biopsies as compared to breast".
Volpara believes the commercial opportunities in lung cancer screening are at least equal to breast screening as lung screening ramps up. It estimates the market could be $400 million in the US alone.
It's currently rated as a buy by Morgans, with a price target of $1.94. That's 54% higher than Thursday's closing price of 89 cents.
