Could this be a millionaire-maker ASX growth stock at 67 cents?

I'll be keeping a close eye on this ASX fintech.

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Every growth investor's dream is to get in on the ground floor of the next explosive stock. Just ask any veteran investor – they'll happily talk your ear off about that one ASX growth stock they had faith in that netted them a fortune (or, more likely, the one that got away). And people say finance isn't romantic!

Growth investing comes with significantly higher risk than other strategies, like value investing or dividend investing. When buying growth stocks, you're looking for the companies you think have the greatest future potential, and not necessarily the best historical performance. Many of these companies probably aren't even profitable yet – but if they promise to fill a gap in the market, big profits could be on the way.

Of course, the future is famously unpredictable, and nothing is ever guaranteed. It's a sad fact of life that not every company that promises the world is going to deliver. But the ones that do could net their loyal shareholders some astounding returns.

So, if you're searching for an ASX growth stock that could be the next diamond in the rough, you're in luck. Because in this article I'm going to reveal one company I think could be due for significant growth in years to come.

Plenti Group Limited (ASX: PLT)

Plenti is an Australian fintech that offers personalised consumer loans. It finances its lending activities by borrowing money from everyday investors and, in return, it pays them regular interest. While this might sound suspiciously like a bank, Plenti goes to great lengths to assure you that it is not a bank.

Instead, Plenti is a peer-to-peer lending platform. It offers loans of up to $65,000 to borrowers with strong credit ratings, with a focus on automative, renewable energy, and personal loans. Borrowers provide Plenti with details about their credit history and financial situation, and the platform offers them a personalised interest rate estimate within minutes, and funding within 24 hours.

On the other side of the ledger, Plenti borrows money from investors in order to write new loans. It offers them very generous returns depending on the term of their investment – if the investor is willing to commit to a longer term (say 3 to 7 years), Plenti rewards them with a higher interest rate (as high as 9% per annum).

So, in theory, everybody wins! Creditworthy borrowers get cheap financing on personal loans and investors can earn a healthy return. Plus, because Plenti relies on its own proprietary technology platform, it has significantly lower overheads than a big bank, allowing it to grow at scale.

What about the financials?

The company reported strong first-half FY25 results for the six months ending 30 September 2024. Loan originations were steady versus the prior comparative period, at $627 million. Revenues were up 28% to $124.2 million and cash net profit after tax (NPAT) surged 260% to $5.5 million.

This adds to an impressive string of half-yearly results, where revenues have grown at a compound annual growth rate (CAGR) of 49%, stretching back to the first half of FY22. And remember how I mentioned growing at scale? Well, its cost-to-income ratio for the half was just 24%, down from 29% in the first half of FY24.

But the biggest recent news out of Plenti is its strategic partnership with National Australia Bank Ltd (ASX: NAB). Under the arrangement – originally announced back in November 2023 – NAB markets and promotes the automotive and electric vehicle loan products that are provided via Plenti's lending platform.

Dubbed 'NAB powered by Plenti', the agreement is a significant endorsement of Plenti's technology platform by one of the country's largest banks. The partnership also gives NAB the right to purchase up to 15% of Plenti's share capital (another sign that the bank is impressed by Plenti's business model).

The first car and electric vehicle loans under the partnership were launched to NAB's personal banking customers in September 2024, however volumes are expected to remain moderate over the next six months as the product offering and customer experience are further refined. But significant sales growth could be on the horizon!

Plenti share price snapshot

Despite its solid recent financial performance and the launch of its first car loan products with NAB, the Plenti share price is still hovering around $0.67 (as at the time of writing). In fact, its share price has remained relatively unchanged since surging on the NAB partnership news back in late November 2023 – which means this year could be when this ASX growth stock finally breaks out!

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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