In this article are 3 great ASX tech shares to buy including Betashares Nasdaq 100 ETF (ASX:NDQ) and Pushpay Holdings Ltd (ASX:PPH).
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This article is about three ASX tech shares that may be worth keeping an eye on.
Here are those names:
Betashares Nasdaq 100 ETF (ASX: NDQ)
This exchange-traded fund (ETF) is a collection of many of the biggest technology businesses in the world that are listed in the US.
Its top holdings include businesses like Apple, Microsoft, Amazon, Tesla, Facebook, Alphabet, Nvidia, PayPal, Adobe, Intel, Netflix, Qualcomm and Broadcom.
However, because it’s an index-based ETF rather than a sector-based ETF, it does have some other non-tech holdings like PepsiCo, Costco, Starbucks and Intuitive Surgical.
Since inception it has been one of the best-performing ETFs on the ASX, thanks to outperformance of the overall share market from many of its leading holdings. After the fees per annum of 0.48%, it has produced net returns of 21.7% per annum since inception in May 2015.
BetaShares says that this ETF’s strong focus on technology provides diversified exposure to a high-growth potential sector that is under-represented in the Australian share market.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an electronic donation ASX tech share that serves many of the largest churches in the US. Its software offering helps in many different ways including the donations, livestreaming services, volunteer scheduling and a custom church app.
The company continues to grow its customer base and it’s benefiting from the shift to cashless transactions. Its growth has accelerated during COVID-19 due to social distancing and restrictions.
Its operating revenue surged by 53% in the FY21 interim result to US$85.5 million. This led to earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) going up 177% to US$26.7 million and operating cash flow jumping 203% to US$27 million.
Over the long-term, Pushpay is aiming for US$1 billion of annual revenue. In FY21 it’s now aiming for EBITDAF of between US$54 million to US$58 million (up from previous guidance of US$50 million to US$54 million).
The ASX tech share’s management are confident that customers are going to be drawn to its combined offering called ChurchStaq which combines the offering of both Pushpay and Church Community Builder, which is a business it acquired not too long ago. Having all of the features and tools in one place is proving to be a popular offering.
At the current Pushpay share price it’s valued at 24x FY23’s estimated earnings.
Kogan.com Ltd (ASX: KGN)
Kogan.com is one of the largest e-commerce businesses in Australia.
It sells a wide variety of different items including TVs, devices, furniture and clothes. The company also offers other services, like Kogan Mobile, and it has a membership program called Kogan First.
Kogan First members purchase on average much more often than non-members, which also demonstrates the significant savings available through the loyalty program. The number of paying Kogan First members increased significantly during FY20.
The ASX tech share has recently decided to acquire Mighty Ape, which is one of the biggest online retailers in New Zealand where it has a major focus on gaming, toys and other entertainment categories.
Before the impact of synergies, Mighty Ape has forecast FY21 revenue of AU$137.7 million, forecast gross profit of AU$45.7 million and forecast earnings before interest, tax, depreciation and amortisation (EBITDA) of AU$14.3 million.
Kogan expects significant revenue and cost synergies across plenty of areas of the business after the Mighty Ape acquisition.
There are not too many ASX tech shares that display consistently rising profit margins. In FY17 it had an EBITDA margin of 4.3%, in FY19 the EBITDA margin was 6.9% and in FY20 the EBITDA margin had grown to 9.3%.
At the current Kogan.com share price, it’s valued at 27x FY23’s estimated earnings.
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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 BETANASDAQ ETF UNITS, Kogan.com ltd, and PUSHPAY FPO NZX. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, Kogan.com ltd, and PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.