Insights

2 top ASX growth shares that might be worth buying

Corporate Travel is one of the ASX shares that could good growth.
The post 2 top ASX growth shares that might be worth buying appeared first on The Motley Fool Australia. –

There are a number of ASX growth shares that may be able to achieve long-term growth.

Businesses that are growing profit might be able to achieve returns for shareholders as well as potentially paying a dividend.

These are two businesses that might be worth watching:

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel Management is one of the largest corporate travel businesses in the world, particularly after its acquisition of Travel & Transport in the US.

It’s currently rated as a buy by the broker Morgans, with a price target of $27.36, which suggests the Corporate Travel Management share price could increase by around 10% over the next 12 months. It was noted that the ASX travel share has already returned to profitability, with more borders opening all the time.

The broker has estimated that Corporate Travel shares are valued at 26x FY23’s estimated earnings.

In the fourth quarter of FY21, the business said that it saw a rapid recovery, led by North American and the EU. In the first half of FY21, it saw total transaction value (TTV) of $403.8 million and an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) loss $15.3 million. The fourth quarter of FY21 saw $821.5 million of TTV and positive underlying EBITDA of $13.6 million.

The ASX growth share recently held its annual general meeting (AGM) and said that its FY22 first half continues to be profitable, with profit across North America, Europe and ANZ. The FY22 first quarter saw underlying EBITDA of $11 million, up from a loss of $7 million a year ago.

Corporate Travel says that its proposition of expert service is more relevant in this COVID recovery environment. It’s continuing to achieve market share gains through “enhanced global reputation in this environment”.

Its largest regions – North America and Europe – continue to recover the fastest and it’s assessing more acquisition opportunities.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is a leading e-commerce business in the beauty and wellness space online, selling many thousands of products.

Whilst the broker Morgan Stanley is expecting growth to slow due to the end of lockdowns, it still rates it as a buy with a price target of $6. It’s expecting good double digit growth of revenue over FY22.

The broker referred to Adore Beauty’s recent FY22 first quarter update.

In the first quarter, Adore Beauty achieved revenue growth of 25% to $63.8 million. Active customers increased to 874,000 – up 24%. The ASX growth share boasted of strong customer retention, with returning customer growth of 63% year on year.

Adore Beauty says that it’s well funded with no debt, providing flexibility to continue growing the business.

Management believe the company is executing strongly on strategic initiatives, by scaling its mobile app, building owned marketing channels and community and expanding its loyalty program.

Adore Beauty CEO Tennealle O’Shannessy said:

We continue to leverage our content strategy to drive brand awareness and discovery, and we are re-investing in the business to accelerate our growth trajectory within a large and growing $11 billion market.

The post 2 top ASX growth shares that might be worth buying appeared first on The Motley Fool Australia.

Should you invest $1,000 in Corporate Travel right now?

Before you consider Corporate Travel, 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 Corporate Travel wasn’t one of them.

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More reading

10 top ASX shares to buy in November

Why is the Webjet (ASX:WEB) share price underperforming Corporate Travel lately?

Top ASX shares to buy in November 2021

2 leading ASX e-commerce shares that could be buys in November 2021

3 explosive ASX tech shares to buy in November

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. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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