Regular readers would already be aware that the past year has been brutal for ASX growth shares.
Such businesses are valued on their future potential, so when interest rates climb steeply as they did in 2022, growth becomes much more expensive.
But with stock markets considered to be forward-looking, more than one commentator reckons growth is due for a resurgence in 2023.
One such expert is First Sentier Investors head of Australian equities Dushko Bajic, who nominated two ASX shares to watch for a sensational year ahead:
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70% boost in profits? Yes, please
Logistics software provider WiseTech Global Ltd (ASX: WTC) largely avoided the crash in growth and technology stocks in 2022, with the share price only 1.15% lower than it was a year ago.
The reasons for the resilience impressed Bajic.
"Amazing result — 24% revenue growth converting into 70% growth in profits and cash flow," he said in a First Sentiers video.
"Return on invested capital rose from 20% to 32%."
The company is reaping the benefits from investing in the quality of its products, he added.
"Organic growth of its software product was 35%."
The number of global freight forwarders that WiseTech has signed in recent years is impressive, but that expansion is still only "part way through".
"Many years to come of strong revenue and earnings growth."
The Motley Fool's Cathryn Goh said last week that WiseTech is in the enviable position of making "mission critical" products for its clients.
"Companies like Toll and DHL rely on CargoWise to execute complex logistics transactions and manage their freight operations from a single platform," she said.
"Demonstrating its stickiness, CargoWise boasts an enviable customer retention rate of 99%. In fact, the software platform has recorded less than 1% customer attrition every year for the last 10 years."
A tech company with 100% contract renewal rate
Similar to WiseTech, heath imaging tech provider Pro Medicus Limited (ASX: PME) also defied the odds in 2022.
The share price is actually 26.8% higher than where it was 12 months ago.
"Quite innovative, generated 35% revenue growth, converted that into 44% profit growth with 100% cash conversion."
Despite the earnings and share price boost, Bajic insisted there is still a "long and large runway" of growth to come.
Hospital consolidation in the US is helping Pro Medicus win new contracts there, but the retention of existing clients is impressive too.
"They've got a 100% renewal rate on their contracts. When they roll over, [they harvest] higher profits, higher volumes and higher prices," said Bajic.
"It's reaffirming the quality of the product and the efficiency it creates [for] its customers."
