2 ASX growth stocks I'd buy for rapidly rising profit

These two are exciting opportunities.

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ASX growth stocks can be a really attractive place to hunt for opportunities because of how quickly their profit is compounding. A bigger profit can justify a higher share price, over time.

Businesses that are demonstrating strong growth may give us a greater chance of delivering outperformance of the S&P/ASX 200 Index (ASX: XJO).

Many promising names on the ASX have soared higher, but I think the two I'm going to talk about still have a promising future at the current prices.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price has risen an impressive 63% in the past six months.

But, I think it can keep rising over the long term – even if there is some volatility along the journey.

Lovisa sells affordable jewellery in numerous countries around the world. At the end of the FY24 first-half result, it had 854 stores globally, with its largest markets by store count being the USA (207 stores), Australia (175 stores), France (80 stores), South Africa (77 stores), Germany (51 stores) and the UK (47 stores).

I think its store count can fairly easily double thanks to its presence in countries with much bigger populations than Australia. For example, the US population is more than ten times bigger than Australia.

The ASX growth stock has only just entered a number of markets including Italy, Spain, Hong Kong, mainland China, Vietnam, Canada and Mexico. I believe each of these markets can host a sizeable Lovisa store network.

Lovisa's HY24 result saw revenue growth of 18.2% to $373 million and earnings before interest and tax (EBIT) growth of 16.3% to $81.6 million.

It's investing a lot to grow, and I believe its profit can grow significantly in the coming years.

If the Lovisa share price were to see a pullback, I'd want to add some more shares to my portfolio.

GQG Partners Inc (ASX: GQG)

GQG is a large fund manager which is rapidly growing. It now has a market capitalisation of $6.1 billion, with funds under management (FUM) of US$137.5 billion as at 29 February 2024.

It had ending FUM of US$91.2 billion for 2021 and US$120.6 billion for 2023. We can see the business has already made strong progress in 2024 with its FUM of US$137.5 billion.

The 12 months to 31 December 2023 saw the business receive US$10 billion of net flows, with net revenue growth of 18.5% to US$517.6 million and diluted earnings per share (EPS) growth of 19% to US 9.55 cents.

The ASX growth stock also announced the launch of its private capital business and the acquisition of minority interests in Avante Capital Partners, Proterra Investment Partners and Cordillera Investment Partners.  

GQG's main funds have outperformed their respective benchmarks over the long term. Outperformance isn't guaranteed, but GQG has shown it has a good investment team.  

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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