Kogan.com Ltd (ASX: KGN) and this beaten down ASX share could be great value options for investors right now. Here’s why…
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While a number of shares have just reached 52-week highs or better this week, not all shares are performing as strongly.
Two ASX shares that have been beaten down this year are listed below. Here’s why they could be in the bargain bin now:
Bravura Solutions Ltd (ASX: BVS)
The Bravura share price is down 17% since the start of the year and an even more disappointing 38% over the last 12 months.
Investors have been selling the shares of the provider of software products and services to the wealth management and funds administration industries due to its poor performance in FY 2021. This has been driven by headwinds created by COVID-19 and Brexit.
One broker that appears to see this as a buying opportunity is Goldman Sachs. It currently has a buy rating and $3.70 price target on the company’s shares. This implies potential upside of 37% over the next 12 months.
Although Goldman Sachs acknowledges that uncertainty remains in the near term as a result of COVID-19, it notes that its new contract pipeline is strong. Outside this, it believes the opportunity for Bravura remains compelling in the UK and Australia. It also expects its emerging microservices ecosystem strategy to transform the business to a subscription-based model and drive growth.
Another ASX growth share that has come under pressure this year is Kogan. The ecommerce company’s shares are down 31% since the start of the year.
This is despite the company delivering one of the strongest results during earnings season in February. For the six months ended 31 December, Kogan reported a 96% increase in gross sales and a 140% jump in earnings before interest, tax, depreciation and amortisation (EBITDA). This strong growth was driven by a surge in customer numbers, increased repeat customer rates, acquisitions, and the accelerating shift to online shopping.
Credit Suisse remains positive on the company and recently retained its outperform rating and $20.85 price target on its shares. Based on the latest Kogan share price, this equates to potential upside of almost 57% over the next 12 months.
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*Returns as of February 15th 2021
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.