2 fast-growth ASX shares that are being sold off

These 2 ASX shares, Redbubble Ltd (ASX:RBL) and EML Payments Ltd (ASX:EML), are rapidly growing. However, they’re being significantly sold off.
The post 2 fast-growth ASX shares that are being sold off appeared first on The Motley Fool Australia. –

There are some ASX shares that are seeing rapid growth in revenue but their share prices are declining significantly in May 2021.

Share markets are becoming more volatile on concerns about inflation and interest rates. There are also some company-specific issues that are causing investors to think again:

Redbubble Ltd (ASX: RBL)

Over the last month the Redbubble share price has fallen by almost 40%. The artist-designed e-commerce product business continues to report a high level of sales growth for shareholders.

Redbubble recently revealed its FY21 third quarter update. It showed marketplace revenue growth of 54% to $103.4 million, 55% gross profit growth to $39.8 million, operating expense growth of 3% and earnings before interest and tax (EBIT) growth of 91% to a loss of $0.9 million.

The ASX growth share pointed out that it’s benefiting from and trying to capitalise on a number of trends. There’s the continuing migration of shopping from offline to online. There’s an increasing desire from consumers for unique goods and services that express and celebrate their personal interests and individualism. There’s the growing ‘creator economy’ which is providing new and exciting designs and products that feeds the search for personalisation.

Redbubble sees a “tremendous opportunity” to continue growing and scale the business. So it’s taking decisions that have a focus on building the strongest possible business over the longer-term. That means a high level of investment, experimenting and execution.

Whilst earnings before interest, tax, depreciation and amortisation (EBITDA) should be positive over an annual period, the margin will be low single digits as it invests heavily during this period.

Redbubble is aiming for annual marketplace revenue of $1.25 billion in a few years.

EML Payments Ltd (ASX: EML)

The EML share price fell 46% yesterday after telling investors about a regulatory issue.

EML told that market that its Irish regulated subsidiary, PFS Card Services (Ireland) Limited (PCSIL), has received correspondence from the Central Bank of Ireland (CBI) raising significant regulatory concerns.

The CBI concerns relate to PCSIL’s anti money laundering and counter terrorism financing, risk and control frameworks and governance. The correspondent states that the CBI is minded to issue directions.

The correspondence does not concern the ASX growth share’s Australian or North American operations, or the operations of PFS’ UK subsidiary, or EML’s other Irish regulated subsidiary (EML Money DAC).

The directions, if made, could “materially impact” the European operations of the PFS businesses, including restricting PCSIL’s activities. In the quarter ending 31 March 2021, around 27% of EML’s global revenue was derived from programs operating under PCSIL’s Irish authorisation.

However, the business is still predicting a lot of underlying growth. Given the timing and early stages of discussion with the CBI, EML is not yet able to estimate the potential direct and consequential costs (including but not limited to legal costs) and impacts of the correspondence on the group’s overall FY21 result.

Excluding those costs and impacts, EML said it’s on track to achieve the underlying results previously guided. That includes revenue growth of 48% to 56%, EBITDA growth of between 54% to 66% and underlying net profit (NPATA) growth of between 25% to 40%.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

More reading

ASX 200 sinks, EML plunges, Appen soars

Here’s why the EML Payments (ASX:EML) share price is cratering today
AGL share price hits lowest level since 2004 as dividend tops 10%

Why BHP, EML Payments, Laybuy, & St Barbara are sinking today

ASX 200 down 1.7%: Appen jumps 12%, EML Payments crashed 37%

The post 2 fast-growth ASX shares that are being sold off appeared first on The Motley Fool Australia.

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!