It has been a volatile year for some of the ASX's leading growth shares. Since the start of 2022, many names known for quickly growing revenue have seen share price declines.
I wouldn't say that every single thing that has fallen is an opportunity, but there are some that I believe have very promising futures, and the lower prices represent good buying.
Quite a few ASX growth shares have rebounded strongly over the past month. For example, the Zip Co Ltd (ASX: ZIP) share price is up 65% over the last month at the time of writing. But I'm not talking about Zip in this article.
I think the two ASX growth shares below have a promising and profitable future. Here's why.
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Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is a leading e-commerce business that sells a wide array of homewares and furniture.
It offers for sale more than 200,000 products from hundreds of suppliers. Those products are sent directly to customers by suppliers, which reduces the need to hold inventory, allowing for a more extensive product range.
Temple & Webster also has its own product range and recently launched The Build, a website to sell home improvement products.
The Temple & Webster share price is currently down by 64% in 2022, which I believe makes it attractively priced. It's up 17% in the last month.
This ASX growth share grew revenue by 23% between 1 January 2022 to 30 April 2022, compared to the prior corresponding period. Revenue was up 116% compared to 2020.
The company is using its rapidly-growing revenue to invest in areas building 'key strategic moats' around the business. This includes data, personalisation, artificial intelligence, augmented reality and logistics.
It's also pursuing further organic growth opportunities, such as its private label offering, and keeping an eye out for acquisitions.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara describes itself as a global leader in the research and development of artificial intelligence for the early detection of breast cancer.
Its software provides clinicians feedback on breast density, compression, dose and quality, enabling them to offer patients personalised breast care and enhanced risk assessment.
The Volpara share price has fallen 38% since the start of 2022, but it's up 46% in the last month.
Its FY22 result displayed a number of attractive statistics. Total revenue rose 32% to NZ$26.1 million and the gross profit margin was 91%. The market share continues to grow – in FY22, 35.5% of US women had a group product applied to their images and data (up from 32% in the prior year).
The ASX growth share has also signed important deals in the last few weeks. It has announced a new research and development collaboration with Microsoft to accelerate the creation of a product that uses mammograms to identify potential cardiovascular issues. Volpara said that breast arterial calcifications were shown to be associated with cardiovascular disease outcomes.
It has also signed a deal with RadNet Inc, which includes Volpara Analytics software and Volpara Risk Pathways software. Risk Pathways will be embedded into eRAD, RadNet's electronic medical record system. The contract incorporates a volume-based model with potential upside.
I think ongoing revenue growth will help as the company benefits from operating leverage, and grows from the deals it has signed.
