What a whirlwind month it's been! As we near the final week of August, the ASX earnings season is reaching its peak. And the results have been nothing short of exciting.
We hope our readers are finding this period as insightful as we are.
Among the ASX companies that have reported so far, some stand out more than others — not only exceeding expectations but also demonstrating strong growth potential.
So, if you're looking for top ASX shares to buy after the latest earnings season, today's team post presents some ideas to explore.
Because we asked our Foolish writers for their thoughts on the best investment opportunities among the companies that have reported standout earnings results.
Here is what the team came up with:
7 best ASX shares to buy after their top earnings results
- GQG Partners Inc (ASX: GQG), $8.06 billion
- Life360 Inc (ASX: 360), $4.31 billion
- Lottery Corporation Ltd (ASX: TLC), $10.79 billion
- Pro Medicus Limited (ASX: PME), $15.82 billion
- WiseTech Global Ltd (ASX: WTC), $40.18 billion
- Resmed CDI (ASX: RMD), $49.20 billion
- Goodman Group (ASX: GMG), $61.94 billion
(Market capitalisations as of market close 23 August 2024).
Why our Foolish writers love these ASX stocks
GQG Partners Inc
What it does: GQG is a fund manager headquartered in the United States. It provides investment products across four main strategies: US shares, international shares, global shares, and emerging market shares.
By Tristan Harrison: The GQG FY24 half-year result was impressive in my view.
Average funds under management (FUM) grew by 46.5% to US$139.5 billion, net revenue grew by 53.1% to US$363.1 million, and net profit after tax (NPAT) grew by 56.4% to US$201.2 million.
The fund manager's main investment strategies have outperformed their respective benchmarks materially, which is helping to grow the FUM organically and attract new FUM. In the six months to June 2024, the business experienced net inflows of US$11.1 billion. This is a strong tailwind for growth.
In my opinion, GQG doesn't seem anywhere near done growing. Rather, it's increasing that growth potential by adding a private markets business.
GQG continues to pay an appealing dividend thanks to its dividend payout ratio of 90% of distributable earnings. The HY24 dividend was hiked by 46.3%.
I believe GQG's investment style will enable it to continue to deliver good returns by investing in unloved sectors and regions, which is sometimes where the best value opportunities can be found.
Motley Fool contributor Tristan Harrison does not own shares of GQG Partners Inc.
Life360 Inc
What it does: Life360 is a family connection and safety company that keeps people close to the ones they love. Its category-leading mobile app serves approximately 71 million monthly active users (MAU) across more than 170 countries.
By James Mickleboro: I think Life360's second-quarter results this month were among the strongest I've seen.
The company reported a 20% increase in second-quarter revenue to a record of US$84.9 million and a positive adjusted EBITDA of US$11 million. This was far stronger than the market was expecting and sent analysts rushing to upgrade their estimates and valuations. It also led to management boosting its guidance for FY 2024.
It now expects consolidated revenue of US$370 million to US$378 million and positive adjusted EBITDA of US$36 million to US$41 million. This is up from its previous guidance of US$365 million to US$370 million and US$30 million to US$35 million, respectively.
And with Life360's seasonally stronger quarters to come, the remainder of FY 2024 looks very bright. As does its long-term outlook, thanks to the popularity of its app and the launch of its advertising business. The latter should allow the company to monetise users in markets where the cost of its paid subscription offering is prohibitive.
Bell Potter responded very positively to the update and assigned its shares a buy rating and a $20.50 price target.
Motley Fool contributor James Mickleboro owns Life360 Inc shares.
Lottery Corporation Ltd
What it does: Lottery Corp is the leading provider of lottery and Keno services in Australia, holding exclusive licenses to run these services in most Australian states and territories.
By Sebastian Bowen: After getting a look at Lottery Corp's earnings this August, I was more than impressed. Lotteries and Keno games wouldn't be expected to deliver massive year-on-year growth.
So you can imagine my delight when I saw a 13.8% rise in annual revenues and a 21.3% spike in net profits after tax. Oh, and the company's dividend hiked by 14.3%, too.
Monopolistic businesses are (understandably and thankfully rare) in the ASX. But this is one, with Lottery Corp literally protected from any competition through government regulations. What's more, this is a highly defensive share with a predictable and reliable earnings base – we tend to buy lottery tickets in the hope of that big win in good times and in bad.
I've long wanted to own Lottery Corp shares, and this August earnings report removed any lingering doubts I had in my mind about doing so
Motley Fool contributor Sebastian Bowen does not own Lottery Corporation Ltd shares.
Pro Medicus Limited
What it does: Pro Medicus is a leading medical imaging provider, offering comprehensive radiology software and services globally, especially in the United States.
By Kate Lee: There are two certainties in life: death and taxes. When it comes to Pro Medicus, however, two things seem just as certain: the company's impressive business performance and its eye-watering share price.
Pro Medicus did it again. As my colleague James highlighted, the company delivered yet another stellar result in FY24, with revenue growth of 29.3% and net profit growth of 36.5%.
The company's strong growth is driven by its success in the US market. North America now represents nearly 90% of the company's revenue. Management claims that Pro Medicus is arguably the only vendor that can fully deploy in the cloud at scale. So far, its growth and impressive list of clients seem to support this claim.
It's also a capital-light business focused on recurring revenue, which generates solid cash flow and a fortress balance sheet.
The high quality comes with a high price tag. Pro Medicus shares are valued at a price-to-earnings (P/E) ratio of 146x on FY25 estimates by S&P Capital IQ. This is not cheap. But it is one of a handful of ASX shares that tick nearly all boxes in terms of a long runway for growth, cash flow generation, scalability, and more.
Investing in high-quality companies tends to pay off handsomely for long-term investors.
Motley Fool contributor Kate Lee does not own shares of Pro Medicus Limited.
WiseTech Global Ltd
What it does: WiseTech Global is a leading developer and provider of software solutions to the global logistics execution industry. WiseTech's growing list of customers includes more than 17,000 logistics companies across 183 countries.
By Bernd Struben: There was a lot to like about WiseTech even before the ASX 200 tech share reported its results on 21 August.
The company operates in a global market and has benefited from rapid technological advancements. That's helped WiseTech achieve ongoing, long-term share price growth since listing in April 2016. With AI coming into its own, I think the company can continue to reward shareholders for the long term.
As for those FY 2024 results, total revenue was up 28% from FY 2023 to $1.04 billion. And earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 28% to $496 million.
Looking ahead, WiseTech is forecasting FY 2025 revenue growth of 25% to 30% in the range of $1.30 billion to $1.35 billion. Management expects FY 2025 EBITDA to increase 33% to 41% in the range of $660 million to $700 million.
The WiseTech share price is up 45% year to date. The stock also trades on a slender, fully franked dividend yield of 0.11%.
Motley Fool contributor Bernd Struben does not own shares in WiseTech Global Ltd.
Resmed Inc
What it does: ResMed is a market leader in treating sleep and breathing disorders through a range of products. Most will know the company by its continuous positive airway pressure (CPAP) machines, which are indispensable to its many customers with sleep apnea.
By Mitchell Lawler: The latest ResMed full-year result ticked all the right boxes. Some investors might have been losing sleep over how the numbers would turn out as weight-loss drugs gain popularity. However, I believe the FY24 report laid those concerns to rest for now.
ResMed avoided deterioration to its top line by raising its prices, driving 11% revenue growth and a 17% boost to its bottom line. The result is all the more impressive considering the relatively subdued economic landscape.
Furthermore, ResMed CEO Mick Farrel believes that weight-loss drugs could benefit the sleep apnea market. Internally generated data showed greater interest and adherence among people taking GLP-1s.
I took the liberty of buying some more ResMed shares myself soon after the company's results.
Motley Fool contributor Mitchell Lawler owns shares in ResMed CDI.
Goodman Group
What it does: Goodman is the market's largest real estate investment trust (REIT). It owns and manages a worldwide portfolio of property assets currently worth $78.7 billion.
By Bronwyn Allen: Goodman Group revealed a $2,049.4 million operating profit for FY24, up 15% from FY23, along with better-than-expected operating earnings per share (EPS) of 107.5 cents, up 14%.
This was ahead of its amended guidance of 13% and its original guidance of 9%. For FY25, Goodman is guiding operating EPS of 117.2 cents, which would be a 9% increase on FY24.
The company recorded a statutory loss of $98.9 million in FY24 due to revaluations. Goodman is an industrial property specialist capitalising on the expansion of the digital economy and artificial intelligence through its growing portfolio of warehouses and data centres in key cities.
It has a $13 billion pipeline of developments in the works, with 40% of its 80 projects being data centres. Broker Citi has a buy rating on Goodman with a 12-month share price target of $40.
Motley Fool contributor Bronwyn Allen owns shares of Goodman Group.
