Many ASX growth shares, particularly those in the tech sector, took an absolute pummelling last year. But some experts are saying right now could be "the beginning of a rebound" for growth stocks.
The prospect of rising inflation, however, still looms large. So the market's appetite for ASX cash-eating machines is definitely not what it once was.
So how can investors get on board the growth train whilst minimising their risk exposure? The answer is to do a little homework on the growth stocks you'd like to buy before diving in.
Our Foolish writers have done some homework of their own and these are the ASX growth shares they reckon are well worth a look at in February:
6 best ASX growth shares for February 2023 (smallest to largest)
Vmoto Ltd (ASX: VMT), $103.52 million
IkeGPS Group Ltd (ASX: IKE), $151.75 million
BetaShares Global Cybersecurity ETF (ASX: HACK), $624.96 million
Johns Lyng Group Ltd (ASX: JLG), $1.51 billion
Domino's Pizza Enterprises Ltd (ASX: DMP), $6.44 billion
Aristocrat Leisure Limited (ASX: ALL), $23.92 billion
(Market capitalisations as at market close on 7 February 2023)
Why our Foolish writers love these ASX growth stocks
Vmoto Ltd
What it does: Vmoto manufactures and sells scooters worldwide, with a strong focus on electric-powered, two-wheel vehicles.
By Bernd Struben: Vmoto's e-scooters aren't like the rentals you see on urban footpaths. Rather, they are high-quality products, even suitable for commercial use.
With the world moving towards zero emissions, I believe the electric scooter phenomenon is likely only in its early days. And, in my opinion, this makes Vmoto a promising ASX growth share.
The Vmoto share price is down by around 12% in 2023, which could represent a good buying opportunity. And, I believe the market appears to have underappreciated some strong Q4 2022 figures.
These included a 19% increase in total units sold from FY21 and a 58% increase from FY20. As at 31 December, the company had a net cash position of $28 million, with no bank debt.
Motley Fool contributor Bernd Struben does not own shares in Vmoto Ltd.
IkeGPS Group Ltd
What it does: Based in New Zealand, Ike predominantly services customers located in North America with software and hardware solutions that help collect, analyse, and manage assets associated with electricity and communication networks.
By Mitchell Lawler: The growth companies that get me really excited are the ones operating in traditionally stagnant and 'boring' industries. These are often enormous, mature markets that are ripe for innovation.
IkeGPS brings cloud-based software to utility providers – making power pole assessment faster, safer, and easier. The offering is clearly a success with its customers, with Tuesday's third-quarter update showing a 134% increase in year-to-date revenue to $23.3 million.
I believe the economics of the business are highly attractive. Namely, the 'platform transactions' and 'platform subscriptions' revenue streams.
As Ike continues to roll out its offering, I think the small marginal cost of providing the software to more customers means this company could be extremely profitable in the future. Not to mention the massive tailwinds associated with the deployment of 5G and maintenance of aging infrastructure.
Motley Fool contributor Mitchell Lawler does not own shares in IkeGPS Group Ltd.
BetaShares Global Cybersecurity ETF
What it does: This exchange-traded fund (ETF) invests in a basket of global shares all involved in the cybersecurity industry.
By Sebastian Bowen: When I put my mind to thinking about which trends might be growth engines of the next decade, cybersecurity tops my list. Last year was a potent reminder of the importance of cybersecurity in our increasingly digital world.
It's pretty obvious that companies, individuals, and governments will all be paying plenty of cash for the foreseeable future to secure both their own and their customers' data.
The BetaShares Global Cybersecurity ETF is, I believe, a perfect way to capitalise on this long-term tailwind. The fund holds some of the top cybersecurity companies in the world, including names like Fortinet, Cisco, Okta, and CrowdStrike.
As of 31 December, this ETF had returned an average of 14.15% per annum since its inception in 2016. With cybersecurity growing ever more important, I think there is a good chance this stellar performance track record can continue in 2023 and beyond
Motley Fool contributor Sebastian Bowen does not own units of the BetaShares Global Cybersecurity ETF.
Johns Lyng Group Ltd
What it does: The company describes itself as an integrated building services group that delivers building and restoration services across Australia and the US. The core business is rebuilding and restoring properties and contents after damage from insured events, including impact, weather, and fire events.
Johns Lyng's client base includes major insurance companies, commercial businesses, local and state governments, body corporate/owner corporations, and retail customers.
By Tristan Harrison: The Johns Lyng share price has dropped close to 20% since early December and more than 30% since April.
That's despite the company projecting that its FY23 business-as-usual (BaU) revenue will rise by 27% to $930 million, and its FY23 BaU earnings before interest, tax, depreciation and amortisation (EBITDA) will increase by 43% to $93 million.
I think these numbers demonstrate that profit is scaling faster than revenue, with rising margins – an attractive feature.
I believe Johns Lyng is executing well on expanding its presence in Australia and the US. It is also growing its bolt-on services. Plus, it's a beneficiary of the unfortunate increase in more costly climate impacts, such as the floods in Victoria and NSW last year.
Motley Fool contributor Tristan Harrison does not own shares of Johns Lyng Group Ltd.
Domino's Pizza Enterprises Ltd
What it does: Domino's is a fast-food staple around the globe. It operates a network of more than 3,100 stores across 10 countries and has plans to continue growing its slice of the pizza pie in the years to come.
By Brooke Cooper: When I look for growth shares, I aim to seek out companies I think are capable of growth in nearly all economic environments. I believe Domino's fits that bill.
The company operates in the discretionary space, and the 'affordable' end at that.
While its price-to-earnings (P/E) ratio is relatively high right now – at around 39 times – I think the pizza chain's intended growth trajectory is worth it.
Domino's grew its footprint by 450 stores in FY22 and plans to better that in FY23. And I'm not alone in my bullishness.
Morgans has slapped the stock with a $90 price target – a potential 25% upside at the time of writing.
Motley Fool contributor Brooke Cooper does not own shares of Domino's Pizza Enterprises Ltd.
Aristocrat Leisure Limited
What it does: Aristocrat Leisure is a gaming technology company that owns a portfolio of industry-leading poker machines and digital games.
By James Mickleboro: My ASX growth share to buy this month is ASX 200-listed Aristocrat Leisure.
I believe the gaming technology company is well-positioned to deliver solid, long-term growth thanks to its leadership position in a growing market, its recent expansion into the potentially lucrative real-money gaming sector, and its very strong balance sheet.
With the company sitting on a mountain of cash right now, it has the opportunity to potentially boost growth with earnings-accretive acquisitions or return funds to shareholders via buybacks.
Motley Fool contributor James Mickleboro does not own shares of Aristocrat Leisure Limited.
