3 ASX growth shares to buy in the current downturn

The current downturn in the share market means these three growth companies are now in the buy zone.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The global spread of coronavirus continues to wreak havoc on the market, with volatility now the new normal. However, for opportunistic investors (with a strong stomach), the current correction in the market presents a great chance to pick up some great ASX growth shares at bargain-basement prices.

Here are three ASX companies that have suffered big drops in their share prices, but should rebound strongly once economic conditions improve.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay had enjoyed a strong start to 2020. Shares in this ASX fintech company had surged to a fresh 52-week high of $4.74 by mid-February. However, shares have now just about wiped off all the gains made this year, shedding over 17% of value and falling all the way back down to $3.92 as at the time of writing.

But rather than scare off investors, I think this dip in the Pushpay share price presents a great opportunity to snap up a growing company at bargain prices.

Pushpay operates in quite a niche market: it develops mobile donating apps for churches. Its payment platform allows members of a church's congregation to donate funds easily and securely online. It also allows the church to analyse donor trends and activity, meaning they can better target fundraising initiatives.

And it's big business. Pushpay recently reaffirmed its full-year FY20 revenue guidance of between US$121 million and US$124 million. But if it can expand to reach 50% of the medium and large church segments in the US, the company believes it can generate a whopping US $1 billion in annual revenues.

Pointsbet Holdings Ltd (ASX: PBH)

Shares in ASX corporate bookmaker Pointsbet have been bit hard by the recent market turmoil. Since floating on the ASX at just $2 back in June of last year, the Pointsbet share price had more than tripled to $6.65 by mid-January. But since reaching those lofty heights, it has dropped a staggering 40% to just $3.92.

To a certain extent, this is understandable. In times of market turmoil, it is generally the companies with the highest valuations that are hit hardest. Spooked investors start to take profits off the table, which can soon spark major selloffs.

But for investors with a little extra cash on hand, Pointsbet is another great ASX growth share to snap up cheap right now. Pointsbet has pursued an aggressive growth strategy in the US and has been an early mover in states where changes in legislation have meant restrictions against online gambling have been relaxed.

The company now has a presence in 12 US States with a combined estimated market size of over US $5 billion. Over the last 12 months, Pointsbet has achieved a number of milestones, not least of which was the signing of a new multiyear partnership agreement with the NBA.

Idp Education Ltd (ASX: IEL)

ASX education company IDP has had a crazy start to 2020. Its share price skyrocketed over 40% in a matter of days in February after the release of positive first-half results. But since hitting an all-time high price of $25.17, it has crashed back down to earth, collapsing 22% to $19.60 as at the time of writing.

IDP helps international students secure study placements at universities in English-speaking countries. The company partners with leading universities in Australia, Canada, New Zealand and the US, and is able to provide course advice to prospective students, as well as assist them with administrative tasks such as visa and health cover applications.

In its first-half results, IDP reported revenue growth of 25% against 1H19 to $379 million. And expanding margins meant net profit after tax (NPAT) surged 42% to $57.7 million. At the time, the company claimed that it was not seeing any negative impacts to its revenues as a result of the coronavirus – although continued disruptions to student travel might hurt its business.

Nonetheless, it remains a great growth story and a good company to buy after the dip in its share price.

Rhys Brock owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Share Market News

Down 90% from its 2021 peak, can IDP Education shares turn around?

Is this beaten down stock a buy? Let's find out.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Share Market News

5 things to watch on the ASX 200 on Thursday

Will the market continue to rise? Let's find out.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Broker Notes

The smartest Australian stocks to buy with $250 right now

$250 to invest? Check out these stocks that brokers rate as buys.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Share Gainers

2 ASX All Ords stocks that would already have more than doubled your money this year

These ASX All Ords stocks have gained 126% and 145% year to date. But how?

Read more »

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Broker Notes

1 magnificent Aussie stock down 23% to buy and hold forever

Let's see why this could be a top share to buy while it is down.

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was an historic day for the ASX, with the market setting a new record.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Bell Potter says this ASX 200 stock can rise 100%+

Let's see which stock the broker is tipping as a buy to clients.

Read more »