Brokers are always on the lookout for ASX shares that could deliver outperformance for investors.
Now that reporting season is over, there is a chance for experts to look over the market and identify which businesses are opportunities, based on recent results.
The two companies I'm going to write about have enormous growth potential and are well-liked by experts. Let's get into why.
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Siteminder Ltd (ASX: SDR)
UBS describes Siteminder as a leading open hotel commerce platform, offering accommodation providers a range of solutions across the guest lifecycle including distribution, bookings, operations management and business intelligence. It reportedly has well over 1,300 'partners' and more than 32,000 properties. It helps those hotels automate manual processes and extend the reach of their accommodation offerings.
The broker said the FY25 result was important as the business ticked a number of factors, including achieving positive free cash flow, accelerated annual recurring revenue (ARR) growth of 27%, up from 22% in the first half of FY25 and it's making progress from deploying the channels+ (C+) and smart distribution platform.
UBS said it continues to like the ASX share's market leadership positioning in a tech market with "plenty of greenfield opportunities."
Discussing whether the ASX share can grow revenue at a compound annual growth rate (CAGR) of at least 25% between FY25 to FY28, UBS said:
Potentially. We believe that SDR has the ability to achieve high 20's MT growth, but we conservatively forecast 24%. Exiting FY25, SDR has materially accelerated ARR (from 22% to 27%). Part of this has been the reacceleration of the core business, while the biggest driver is the successful deployment of the Smart Distribution Platform (SDP) and Channels+ (C+).
We need to see this strong start backed up over the next 12 months with further gains within C+, and then backed up with the expansion of full scale roll-out of Dynamic Revenue+. Meanwhile, growth within the core business is underpinned by: 1) New Channel Manager (CM) and Little Hotelier (LH) customers; 2) Uptake / further penetration of transaction products; 3) Additional modules; and 4) CPI pricing increases. On this basis, we expect SDR to reach 73k customers (~8% of UBSe 950k addressable properties) by FY28E and 14% longer term.
UBS currently has a buy rating on Siteminder shares, with a price target of $8.30.
Aussie Broadband Ltd (ASX: ABB)
The broker is also bullish about Aussie Broadband shares, which UBS describes as an Australian based telecommunications business with a market share of close to 10% of total NBN connections, as of FY24. It sells NBN broadband services through residential, enterprise, government and wholesale clients.
UBS noted that the most topical part of the result was the significant wholesale contract award with MORE Telecom, which is a six-year agreement that will see around 290,000 subscribers migrate onto Aussie Broadband's wholesale platform, driving an increase of operating profit (EBITDA) by $12 million in FY27, with a current expectation that all subscriptions will be migrated by the end of FY26. The Buddy brand will also be sold to MORE for around $8 million.
The broker said the result modestly beat guidance, with operating profit (EBITDA) growth of 15% to $138 million, compared to guidance of between $133 million to $138 million. On an organic basis, revenue growth was 12% and subscriber growth was 15%, which was "solid" and reflects "ongoing market share shift from the incumbents to the challengers", of which Aussie Broadband is a "clear leader".
The ASX share announced EBITDA guidance of between $157 million to $167 million – UBS is predicting EBITDA growth of 16% to $161 million, with an estimated 10% net subscriber addition with further market share gains.
UBS reckons Aussie Broadband could reach an estimated market share of 14.9% by FY28, up from 8.4% in FY25. Total residential subscriptions could rise at a compound annual growth rate (CAGR) of 10% to 797,000 by FY28.
The broker has a buy rating on Aussie Broadband shares, with a price target of $6.
