3 ASX tech shares that could return 100% in 2023

Here are three names that could deliver strong outperformance.

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Key points

  • Airtasker continues to experience solid double-digit revenue growth, as its cash burn reduces
  • Gentrack is indirectly benefiting from a strong rebound in travel, as airports plan more software spending
  • Megaport is suffering from slowing growth, but management expects a recovery

The ASX tech share sector has been through plenty of pain since the start of 2022. But I think that gives it more of an opportunity to rebound.

For example, if a business dropped from $100 to $50, that's a fall of 50%. If an investor bought shares and it went back to $100, that would be a rise of 100%. I think some names could finish 2023 at a share price twice as high as the start of the year.

Still, a doubling of the share price in a short amount of time is certainly not guaranteed. With how much volatility we're seeing at the moment, they could just as easily finish 2023 lower than where they are right now.

However, with inflation seemingly peaking in the US and Australia, and interest rates getting close to the end of rises, the outlook could be improving for sold-off ASX tech shares, particularly if it seems like interest rate cuts are getting closer by the end of the year.

Airtasker Ltd (ASX: ART)

Created with Highcharts 11.4.3Airtasker PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

The Airtasker share price is down around 60% since December 2021.

This business provides a platform that enables people to advertise a task that needs doing, while taskers can offer to do the job.

I think the ASX tech share can continue to grow revenue and scale over the rest of 2023. Airtasker said in the three months to December 2022, its revenue rose 40.2% (13.6%, excluding the Oneflare acquisition).

What I thought was particularly exciting was that the UK's trailing twelve months of gross marketplace volume (GMV) grew 83.1% to £3.5 million, while US quarterly posted tasks increased 5.4 times year over year.

It also said its cash burn fell 44.3% to $2.6 million, while also having $23.3 million of cash on the balance sheet.

I think its ongoing growth can recapture investor attention as its profitability improves.

Gentrack Group Ltd (ASX: GTK)

Created with Highcharts 11.4.3Gentrack Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Gentrack is an ASX tech share that provides software for utility companies and airports to run their operations.

A number of leading airports use Gentrack including Melbourne Airport, Sydney Airport, Gatwick Airport, Schiphol (Amsterdam's airport), and Auckland International Airport Limited (ASX: AIA).

Gentrack recently reported the rapid rebound of travel has accelerated airports' digitisation plans. In fact, the company said that 55% of airports expected to spend more on IT.

The company also said it's going to expand globally in 2023 – it plans to use its partnership strategy to replace other tech providers. It's also going to "amplify" its marketing to build global brand awareness, with around $3 million per year to spend on sales and marketing.

Management expects to achieve its previous FY24 revenue target of $130 million in FY23. FY24 revenue is now guided to be $150 million. As it scales, the company's profit margin could improve.

While the Gentrack share price is higher than 2022, I think it could keep rising as momentum builds.

Megaport Ltd (ASX: MP1)

Created with Highcharts 11.4.3Megaport PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

The Megaport share price is down more than 70% since November 2021.

Higher interest rates and a slowing growth rate certainly aren't impressing investors. But I think the company's exposure to cloud computing infrastructure gives it a promising outlook for the long term.

The second quarter of FY23 still showed growth, with revenue up 10% quarter over quarter to A$37 million, and December 2022 monthly recurring revenue up 6% quarter over quarter to A$12.4 million.

However, at the end of the quarter, the number of customers had only increased 1% to 2,739 quarter over quarter and total ports had increased 2% quarter over quarter. Average revenue per port in December 2022 was A$1,260, an increase of 3.8% quarter over quarter.

Megaport said that the economic uncertainty is delaying customer decision-making. However, the company isn't seeing an increase in customer churn. The ASX tech share expects sales trends "will improve when the global economy stabilises". I think investor and business confidence could return by the end of 2023.

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 Megaport. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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