Insights

2 ASX tech shares that might be buys in October 2021

ELMO and Volpara could be good ASX tech shares to think about in October.
The post 2 ASX tech shares that might be buys in October 2021 appeared first on The Motley Fool Australia. –

The technology sector can be a fertile place to look for opportunities. ASX tech shares may be a good industry to look for good ideas.

Businesses in the tech sector may be able achieve good operating margins because of the intangible nature of it. That intangible part also means that businesses can grow quickly because they can very easily replicate that software.

Here are two ASX tech shares to consider:

ELMO Software Ltd (ASX: ELO)

ELMO Software is a business that offers cloud-based services for small businesses and mid-market organisations to manage people, processes, pay and expenses. It operates a software as a service (SaaS) model across Australia, New Zealand and the UK.

In FY21, it generated revenue of $69.1 million, which was an increase of 38.1%. Its annualised recurring revenue (ARR) increased by 52.1% to $83.8 million.

The last financial year saw the business generate positive earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.4 million, up $3.3 million from the prior year. That’s after spending a lot on growth.

ELMO Software sometimes launches a new module for businesses to utilise on top of existing services, which can increase the value to the customer, and increase the revenue from that customer. It recently launched COVIDsecure, which enables businesses to record, monitor and report on their employees COVID vaccination and test status.

Despite the growth and progress that ELMO Software is making, the ASX tech share has seen its share price fall by 32% since the start of the year.

Management say that returning business confidence and the increase in remote based working is driving the adoption of cloud-based business tools, including HR technology. The company said FY22 is shaping up to be a good year for ELMO, across both the mid-market and small business segments.

In FY22 it’s expecting to report revenue of at least $90.5 million and EBITDA of at least $1 million. The ARR is expected to reach between $105 million to $111 million.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is another ASX tech share that could be worth looking at. It is in the healthcare space, providing breast screening software.

The company has also started making connections in the lung cancer screening space. It has announced partnerships with other leading organisations that can improve its offering and effectiveness including RevealDx and Natera.

Volpara’s breast screening segment is what is currently driving the business revenue higher. It has reached coverage of 33% of US women being screened. The company measures its average revenue per user (ARPU), which it sees as an important driver of future growth. In the first quarter of FY22, the ARPU was US$1.42. The average ARPU in the first quarter was US$1.55. ARPU of up to US$5.87 was achieved at some sites.

Its SaaS church continues to remain low, whilst the gross profit margin is above 90%.

Volpara’s ARR has reached US$19.2 million in the first quarter. In FY22 its focus is risk and genetics. The company said that US states moving more strongly in that direction will continue to help drive and accelerate growth in the Volpara business at very little additional cost to the business itself.

The post 2 ASX tech shares that might be buys in October 2021 appeared first on The Motley Fool Australia.

Should you invest $1,000 in ELMO Software right now?

Before you consider ELMO Software, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ELMO Software wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Top ASX shares to buy in October 2021

2 growing small cap ASX shares for your watchlist

Broker names 2 small cap ASX shares to buy

Volpara (ASX:VHT) share price under spotlight on lung screening expansion
4 small cap ASX shares to watch

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Elmo Software and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended Elmo Software and VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!