Afterpay Ltd (ASX:APT) is one of the 2 ASX growth shares that have experienced big falls in value in recent months. Here’s a closer look
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ASX growth shares have had a rather tumultuous few weeks. We’ve seen something of a readjustment in this area as rising bond yields have forced investors across both the United States and here on the ASX to re-evaluate growth shares’ valuations. Luckily, that also means it’s a great time to take a second look at this formerly high-flying space.
So here are 2 ASX growth shares that might be worthy of such consideration today:
Bubs Australia Ltd (ASX: BUB)
The Bubs share price hasn’t had a great month, or a great six months, for that matter. The Bubs share price is today (at the time of writing) trading at 52 cents a share, down over 16% over the past month. It’s down an even nastier ~35% since mid-September and is more than 50% down from the all-time high we saw back in May last year.
Like it’s competitor A2 Milk Company Ltd (ASX: A2M), Bubs has been hard hit by the narrowing daigou trade to China sparked by the coronavirus pandemic. Daigou involves customers buying Bubs’ products in Australia and shipping them to China to be resold or distributed. However, in its half-year earnings report released last month, Bubs reported that the other parts of its business were performing well. Its Australian market share has tripled with Bubs’ strong product presence across supermarkets and pharmacies, and its balance sheet remains strong.
Afterpay Ltd (ASX: APT)
The Afterpay share price is having a great day today (up close to 4%). However, this buy now, pay later (BNPL) pioneer is still in one of its worst corrections in years. Afterpay shares have fallen dramatically from the all-time high of $160.05 the company set just last month. At today’s price of $115.22 (at the time of writing), the company is down around 30% from those highs.
And yet, Afterpay continues to grow at breakneck speed. In its half-year earnings report also released last month, Afterpay reported that gross sales volumes were up 106% to $9.8 billion. Big numbers there. But Afterpay’s surge in earnings before interest, tax, depreciation and amortisation (EBITDA) was even bigger at 521%. Pleasingly for the company, its North American expansion plans also seem to be booming. Afterpay reported that its customers from this region were up 127% year on year to more than 8 million. It’s also putting in rapid plans to expand into Europe and Asia.
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Sebastian Bowen owns shares of A2 Milk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.