ASX shares with the ability to expand the most in the next five years could be great investments because of their future profit potential.
The three businesses I want to highlight are relatively small, are growing at a fast pace, and are delivering rising profit margins.
I'm very bullish on what the below businesses could achieve in the coming years. This is why I'm already a shareholder and would happily buy more.
Image source: Getty Images
Siteminder Ltd (ASX: SDR)
Siteminder provides software to hotels around the world to help them with their operations and generate the most revenue from their rooms, including one offering that enables Siteminder to change room prices throughout the year on behalf of the hotel to maximise earnings and occupancy.
The global digitalisation trend is a very useful tailwind for Siteminder. It's winning thousands of hotels from around the world as subscribers, with a recent focus on larger hotels.
Siteminder has a goal of increasing its annual recurring revenue (ARR) at 30% per year, which is an excellent goal. While it's not quite there, revenue is currently rising at more than 20% per year through winning new subscribers and increasing its average revenue per user (ARPU) through selling additional modules.
The business is also seeing rising profit margins thanks to the operating leverage of software because costs aren't increasing at the same pace.
Guzman Y Gomez Ltd (ASX: GYG)
GYG is a Mexican food business with big ambitions in both Australia and internationally.
The ASX share is aiming to quadruple its Australian network to around 1,000 locations within the next 20 years. It's currently adding around 30 locations annually with a goal to increase that rate in the coming years.
Guzman Y Gomez is currently seeing total network sales growth of around 20% year-over-year thanks to both more restaurants and mid-single-digit comparable sales growth.
It currently has a presence in Singapore, Japan and US, with the Asian markets delivering pleasing double-digit growth. The key market of Australia is growing strongly, and the international markets are a compelling bonus.
As a bonus, the business is paying a dividend, so it could deliver pleasing passive income in the coming years.
Tuas Ltd (ASX: TUA)
Tuas is a Singapore-based telecommunications business focused on providing mobile services.
The company grew its active mobile services by 21.7% to 1.4 million in the FY26 half-year result. Revenue also rose by 26% to $91.9 million and underlying operating profit (EBITDA) increased 27% to $42.1 million.
As you can see, the business is growing at a strong double-digit rate. This is rapidly increasing its intrinsic value, particularly as its underlying profit margins are increasing.
Excitingly, Tuas is acquiring a Singaporean competitor called M1 which will add significant profit generation to the overall business and remove one of its main competitors from the market.
Additionally, in the coming years, I'm hopeful it will expand into other Asian neighbour countries which could expand its addressable market. Over the long-term, I think it could become a sizeable player in the South East Asia.
