Why I think these 2 ASX growth shares could keep marching upwards

Still down heavily in 2022, here are two ideas that I think could rebound.

| More on:
A young boy pushes his bicycle uphill on a rocky road. He is wearing a helmet and has his tongue hanging out as though he is making a face to show how exhausted he is.

Image source: Getty Images

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

Key points

  • After recent share market volatility, I think investors can find some attractive opportunities
  • Temple & Webster is a leading e-commerce business that is growing revenue and investing
  • Volpara offers leading breast screening and risk assessment software

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.

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.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft, Temple & Webster Group Ltd, VOLPARA FPO NZ, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Young boy in business suit punches the air as he finishes ahead of another boy in a box car race.
Opinions

Why I think these 2 ASX 300 stocks will beat the market in 2025

I’m very optimistic about a few ASX growth shares.

Read more »

A businessman compares the growth trajectory of property versus shares.
Opinions

What's the outlook for shares vs. property in 2025?

The experts have put out their new year predictions...

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Opinions

My ASX share portfolio is up 30% this year! Here's my plan for 2025

The best investing plans shouldn't need too many updates.

Read more »

Man in an office celebrates at he crosses a finish line before his colleagues.
Opinions

These stocks made my share portfolio a market-beater in 2024

Beating the market is the least important takeaway from this year.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

2 underappreciated ASX 200 shares to buy now

Investors may be undervaluing these ASX 200 shares heading into 2025, according to this expert.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Resources Shares

Is the BHP share price a buy? Here's my view

Is it time to dig into this beaten-up miner?

Read more »

A person holds their hands over three piggy banks, protecting and shielding their money and investments.
How to invest

I'm preparing for an ASX stock market crash in 2025

Whatever happens next year, my portfolio will be ready...

Read more »

Happy couple enjoying ice cream in retirement.
Opinions

2 ASX shares I loaded up on in November for long-term wealth

I’m excited by the dividend and capital growth potential of these stocks.

Read more »