The market may have pushed higher over the past 12 months, but not every ASX share has been so lucky.
The two ASX shares in this article have fallen over 60% from their highs despite the market's rise. Here's why I think that has been overdone and created a buying opportunity.
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Temple & Webster Group Ltd (ASX: TPW)
There's no other way to put it. Temple & Webster shares have been hammered.
The online furniture and homewares retailer is down around 80% from its high, which is a huge reset for a business that was once priced for very strong growth.
I can understand why the market has turned more cautious. Consumer spending has been under pressure as interest rates rise, housing activity has been uneven, and investors have become less willing to pay high multiples for online retail growth.
But I still think Temple & Webster has an attractive long-term opportunity.
The key for me is market share. Furniture, homewares, and home improvement is a very large category, and Temple & Webster still has only a small share of the total market. That gives it a long runway if more spending continues to shift online over time.
I also like that the company is not trying to build a traditional store network. Its online model gives it the ability to offer a wide product range without carrying the same physical store footprint as many older retailers. That can support scale over time if the business keeps growing.
This is not a risk-free recovery story. Consumer demand could stay soft, competition could remain intense, and profitability needs to keep improving.
But after an 80% decline from its high, I think a lot of disappointment is already reflected in the share price. For patient investors, Temple & Webster shares could be worth considering for the long term.
WiseTech Global Ltd (ASX: WTC)
WiseTech has also fallen a long way, with the share price down around 60% from its high.
That is a dramatic move for one of the ASX's highest-quality technology businesses.
The market has been worried about valuation, acquisitions, growth expectations, and the potential impact of artificial intelligence (AI) on enterprise software. I do not think those concerns should be dismissed.
But I also think WiseTech remains a very strong business.
Its CargoWise platform is used in the global logistics industry, which is complex, fragmented, and difficult to manage without specialised software. Once a system like CargoWise becomes deeply embedded in customer workflows, I believe it can be difficult to replace.
That stickiness is valuable, in my opinion.
I also think WiseTech has an opportunity to use AI as a tool rather than simply treat it as a threat. Logistics is full of documentation, routing decisions, compliance tasks, and workflow complexity. If AI can improve automation and efficiency inside CargoWise, it could make the platform more useful over time.
The valuation is now much more interesting than it was at the peak. It may still not look conventionally cheap, but high-quality software rarely does.
Foolish takeaway
I do not think investors should buy every stock that has fallen heavily.
Some share price declines are warnings, not opportunities. But in the case of Temple & Webster and WiseTech, I think there is still enough quality and long-term growth potential to take a closer look.
Both businesses have been marked down sharply. That does not remove the risks, but it does make the risk-reward more appealing in my view.
