Believe it or not, this notorious ASX stock is now back in the buy zone

Well, at least according to the folks at ECP. Take a look at their reasoning.

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Sometimes an ASX-listed company gets such a bad rap — through their own fault or otherwise — that their share price remains in the doghouse regardless how they turn it around.

But if you're willing to take a punt on one of these "stained" businesses, a bargain of the century could be on offer.

Let's take a look at one such example named by the team at ECP Growth Companies Fund recently:

Sinner turned saint?

Perhaps no ASX stock has been a pariah in recent times as much as data analytics provider Nuix Ltd (ASX: NXL).

The company listed in December 2020 with much fanfare and hype, and the share price quickly rose above $11.

But then a series of governance failures, accusations of misleading IPO prospectus, fraud investigations, and legal battles led to investors fleeing Nuix like it was a burning building.

For much of last year, and even as recently as last month, the stock traded below $1.

But, as ECP analysts' pointed out, July saw a hint of a revival.

"Nuix Ltd outperformed after pre-reporting their FY23 results during the month," they stated in a memo to clients.

"The result showed positive ACV [annual contract value], revenue and EBITDA growth, which was taken positively by the market."

Indeed, the Nuix share price exploded 88.2% during the month.

The ECP team is bullish going forward.

"Reading into the results, multi year deals as a percentage of revenue has declined, while other activity such as new deals, renewals, consumption increased.

"This is a positive sign for the company in our view."

Two more ASX shares going gangbusters

ECP analysts also expressed their enthusiasm for Megaport Ltd (ASX: MP1) and GQG Partners Inc (ASX: GQG), which rose 41% and 17% respectively last month.

"Megaport Ltd outperformed following an upgrade to guidance and their 4Q result. 

"The company upgraded normalised EBITDA, saying they expect FY24 EBITDA to be higher than the previously guided range of $41 to $46 million."

The ECP memo noted the bullish guidance was put out even though Megaport expects headcount and capital expenditure to increase to execute growth opportunities.

Investment outfit GQG Partners also released a quarterly update.

"[It] saw continued inflow momentum with US$1.2 billion for 2Q23, and a further US$8.4 billion added from strong performance over the quarter. 

"We continue to see GQG as a leading franchise in the growth phase of its lifecycle at an attractive valuation."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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