Some of the most uncomfortable moments in investing can also be the most interesting.
When share prices fall sharply, it's easy to assume something is broken. And sometimes that's true. But other times, the sell-off goes further than the fundamentals justify.
That's when I start paying closer attention.
Right now, there are a few ASX growth shares that have been hit hard over the past year. Two that stand out to me are in this article.
Both are down heavily from their highs. And in my view, both could offer compelling upside if things go right from here.
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Catapult Sports Ltd (ASX: CAT)
Catapult is one of those technology businesses that doesn't always get the attention it deserves.
It provides performance analytics and wearable technology to professional sports teams around the world. That might sound niche, but it's actually a growing global market as teams invest more in data-driven decision making.
At its peak, the market was clearly very optimistic about Catapult's growth potential. Since then, sentiment has cooled significantly, with the share price falling close to 60% from its 52-week high of $7.72.
When I look at the business today, I don't see a company that has lost its opportunity. If anything, the long-term thesis still appears intact.
Catapult continues to expand its customer base across elite sports leagues and deepen its product offering. As more teams adopt data and analytics, the company has a clear runway for growth.
There's still execution risk, and it may take time for confidence to return. But after such a large pullback, I think the risk-reward balance is looking very attractive.
DroneShield Ltd (ASX: DRO)
DroneShield is a very different type of growth story, but just as interesting.
The company develops counter-drone technology used in defence and security applications. With the increasing use of drones in both military and civilian settings, demand for these solutions is growing quickly.
Its share price had a strong run, driven by rising interest in defence spending and geopolitical tensions. But more recently, it has pulled back almost 40% from its highs.
To me, this looks more like a reset in expectations rather than a collapse in the underlying opportunity.
DroneShield is still operating in a market that is expanding rapidly. Governments and organisations are investing heavily in security solutions, and counter-drone capability is becoming increasingly important.
It won't be a smooth journey. Revenue can be lumpy, contracts can take time, and sentiment can swing quickly.
But if the ASX growth share continues to win contracts and execute on its strategy, I think there is potential for the share price to recover strongly over time.
Foolish takeaway
In Catapult Sports and DroneShield, I see two businesses that still have meaningful long-term growth potential, despite their recent falls.
That doesn't mean they'll bounce back immediately. Volatility is likely to remain part of the story.
But from where I sit, these look like the types of beaten-down ASX growth shares that could reward patient investors if sentiment turns and execution follows through.
