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Here’s a look at how ASX WAAAX shares compare on growth

How do the 5 tech stars stack up in FY21?
The post Here’s a look at how ASX WAAAX shares compare on growth appeared first on The Motley Fool Australia. –

Now that the ASX August earnings season has drawn to a close, it’s a good time to run the ruler over the WAAAX shares.

Armed with the FY21 full-year reports of all 5 ASX-listed technology shares, let’s assess how these companies compare to each other.

Is there still growth in WAAAX shares?

Firstly, a friendly reminder, WAAAX shares is an abbreviated term for five of the most recognisable tech companies on the ASX: WiseTech Global Ltd (ASX: WTC), Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APX), Altium Limited (ASX: ALU), and Xero Limited (ASX: XRO).

While the notoriety of all these companies has been high in recent years, the performance of their respective share prices has been mixed. The fact is each of these companies operates in vastly different industries. For instance, logistics management software and payment solutions are like chalk and cheese.

However, there are likely many investors out there grappling with which investment might provide the best returns in the future. For that reason, let’s compare the growth figures of each for FY21.

How do the WAAAX shares compare?

Revenue

There are many ways to evaluate growth, but there are a few common ones. In this comparison, we’ll be focusing on revenue and earnings.

Revenue tends to be a go-to metric for evaluating growth because often ‘growth’ companies prioritise this over profitability.

Below is a table that summarises each of the five companies FY21 revenue growth:

ASX-listed company
FY21 revenue
Growth year-over-year

WiseTech Global Ltd (ASX: WTC)

$507.5 million
24%

Afterpay Ltd (ASX: APT)

$924.7 million
78%

Altium Limited (ASX: ALU)

US$180.2 million
6%

Appen Ltd (ASX: APX)

US$196.6 million
-2%

Xero Limited (ASX: XRO)

NZ$848.8 million
18%

As we can see, Afterpay delivered the highest rate of growth year-over-year (YoY) out of the WAAAX shares. This was underpinned by strong customer growth in North America and an increase in repeat use.

At the other end of the scale, Appen failed to grow its revenue in FY21. Reportedly, this was the result of its project delivery being skewed to the second half of the year. In addition, Appen customers broadened their spending outside of digital advertising.

Earnings

It is reassuring when ASX shares are delivering double-digit revenue growth. However, that is only half the story when it comes to comparing growth figures.

At some stage, investments need to grow profits to return value to shareholders. On that note, let’s take a look at how the WAAAX shares performed on an earnings basis in FY21.

ASX-listed company
FY21 profit/(loss)
Growth year-over-year

WiseTech Global Ltd (ASX: WTC)

$105.8 million
100%

Afterpay Ltd (ASX: APT)

($159.4 million)
-597%

Altium Limited (ASX: ALU)

US$35.3 million
79%

Appen Ltd (ASX: APX)

US$6.7 million
-55%

Xero Limited (ASX: XRO)

NZ$19.8 million
493%

Although Afterpay achieved the highest revenue growth, its bottom-line loss widened in FY21. Meanwhile, cloud-based accounting company, Xero, shot the lights out with a staggering 493% increase in profits.

Additionally, WiseTech and Altium posted similarly impressive earnings growth. Based on this data, WiseTech has become the most profitable of the WAAAX shares, pumping out $105.8 million in net profits after tax.

The post Here’s a look at how ASX WAAAX shares compare on growth appeared first on The Motley Fool Australia.

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More reading

These were the worst performing ASX 200 shares last week

Here’s why the Afterpay (ASX:APT) share price is up 42% in the last 3 months
Here’s why the Afterpay (ASX:APT) share price is sliding on Friday
The WiseTech Global (ASX:WTC) share price is up 5% in the last week
How has the Square share price performed since announcing the Afterpay deal?

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. 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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