ASX Growth Shares for 2020 – PPH, WEB, ALU and APT

  • Dec 23, 2019 AEDT
  • Team Kalkine
ASX Growth Shares for 2020 – PPH, WEB, ALU and APT

Growth stocks are the stocks of those companies that generate positive cash flows that are substantial and sustainable, and their income and revenues are anticipated to increase at a rate faster than that of an average company within the same industry.

From the historical trends, growth stocks have a topping pattern and can be easily detected by an experienced investor. Whether you buy the stock or make a trade through a stockbroker, keep in mind the right time to cash out rather than relying on emotions and feelings.

Some benchmarks are nearing their peak with handful of stocks trading higher. However, this growth is not stable and can be affected by cyclical factors. Let us see how some of the growth stocks listed on ASX are performing.

Pushpay Holdings Limited (ASX: PPH)

Pushpay Holdings Limited (ASX: PPH) provides a donor management system, catering to non-profit organisations and education providers, as well as the faith sector in countries including the United States, Canada, Australia and New Zealand. As on 23 December 2019 (AEDT 01:01 PM), the market capitalisation of the company stood at $ 1.07 billion.

Pushpay and Church Community Builder Announce Business Combination: During mid-December 2019, the company and US-based church management system (ChMS) solutions provider Church Community Builder, LLC announced the combination of the two businesses. The company acquired the complete ownership in Church Community Builder for a consideration of USD 87.5 million, with the combination targeted towards the delivery of a fully integrated ChMS, custom community app and giving solution for customers in the US faith sector.

Substantial Rise in NPAT: For the first half year ended 30 September 2019, revenue of the company from continuing operations increased by 30% to USD 57.38 million from USD 44.01 million in the six months ended 30 September 2018. This resulted NPAT to rise by 247% to USD 6.5 million from a loss of USD 4.4 million. In the same time span, the company reported a gross profit margin of 65%, an improvement from 57% on the prior year.

What to Expect from Pushpay: The company would implement on its plan to provide inventive and innovative solutions for the church and is likely to enhance growth in revenue and improvement in margins. The company also gave0020guidance for its revenue and expects the figure to range between USD 121.0 million and USD 124.0 million with gross margin of more than 63%. Pushpay Holdings further anticipates EBITDAF to range between USD 23.0 million and USD25.0 million.

Stock Performance: The stock was trading at $ 3.870 on 23 December 2019 (AEDT 01:01 PM), down by 0.769% from its previous closing price. As per ASX, the stock of PPH gave a return of 28.71% on a YTD basis and a return of 17.82% in the past one month. This led the stock to trade very close to its 52-weeks’ high level of $ 3.990. In terms of valuation, the stock was trading at a P/E multiple of 25.37x.

Webjet Limited (ASX: WEB)

EBITDA More Than Doubled in 2 Years: A consumer discretionary sector player, Webjet Limited (ASX: WEB) provides a full range of online travel booking service for flights, hotels, car hire, cruises, and tours. As on 23 December 2019 (AEDT 01:32 PM), the market capitalisation of the company stood at $ 1.76 billion. In the recently held Annual General Meeting of the company, the top management addressed its shareholders and stated that revenue of the company soared by 26% to $366.4 million and EBITDA went up by 43% to $124.6 million.

Collapse of Thomas Cook: A major client of WebBeds business, Thomas Cook collapsed. This is likely to cost the company millions in receivables, which is not expected to recover; however, there would be no effect on the hotel contracts of 3k+ that Webjet acquired from Thomas Cook.

Future Opportunities and Guidance: The company expects FY20 underlying EBITDA to be in the range of $157 million to $ 167 million with EBITDA for the first half to be at least $ 80 million. Webjet further anticipates an increase of 5-10% in corporate costs over FY19, reflecting ongoing investments across the group functions to support significantly increased global scale, stronger governance and risk management. In addition, WebBeds continues to grow the company’s total transaction value and EBITDA in all the regions.

Stock Performance: On 23 December 2019 (AEDT 01:32 PM), the stock of Webjet was trading at $ 13.265, up by 2.274% from its previous closing price. As per ASX, the stock of WEB gave a return of 22.47% on a YTD basis and a return of 0.70% in the past 30 days. In terms of valuation, the stock was trading at a P/E multiple of 27.600x with an annual dividend yield of 1.7%.

Altium Limited (ASX: ALU)

Substantial Rise in Earnings: Altium Limited (ASX: ALU) is in the business of development and sales of computer software for the purpose of designing of electronic products. As on 23 December 2019 (AEDT 01:45 PM), the market capitalisation of the company stood at $ 4.69 billion. In the recently held Annual General Meeting, the top management stated that FY19 revenue of the company grew by 23% to USD 171.8 million and profit increased by 41% compared to the financial year 2018. This resulted earnings per share to rise by 41% to US 40.57 cents.

Industry Transformation Through Market Dominance: The company’s transformation is based upon the achievement of market dominance and it is committed on achieving 100,000 subscribers and USD 500 million in revenue by 2025. For the same purpose, the company would utilise brand advertising to entice customers and boost the efficiency of its transactional sales model with business intelligence.

Looking Ahead to Opportunities: During FY2020, Altium is aiming to exceed its current strategic revenue target, which was set at USD 200 million in 2016 for the 2020 fiscal year through organic growth. It also anticipates EBITDA margin to be in the range of 37% to 38% in the upcoming year.

Stock Performance: The stock was trading at $ 35.730 on 23 December (AEDT 01:45 PM), down by 0.14% on the previous day. In the time span of one year, the stock gave a return of over 73.94% and a return of approx. 1.85% in the past 6 months. This resulted the stock to trade close to its 52-weeks’ high level of $ 38.490. In terms of valuation, it was trading at a P/E multiple of 61.85x with an annual dividend yield of 0.95%.

Afterpay Limited (ASX: APT)

Afterpay Limited (ASX: APT), which provides technology-driven payment solutions through its Afterpay and Pay Now services and businesses, had a market capitalisation of $ 7.63 billion, as on 23 December 2019 (AEDT 01:56 PM). The company updated its shareholders on its Equity Incentive Plan, wherein it stated that approximately 7,788,243 US Options are currently on issue and the maximum number of shares that can be issued under the Plan in exchange for all exercised shares cannot exceed 21,777,661 shares.

Record Sales Performance for Month of November: The company gave a business update, reporting that underlying sales of the company stood at $ 1.0 billion at the end of November 2019, representing the highest monthly performance since inception. In the same time span, the company had 0.5 million net new customers.

The company has recently announced a name change from Afterpay Touch Group Limited to Afterpay Limited.

Stock Performance: The stock was trading at $ 29.350 on 23 December 2019 (AEDT 01:56 PM), up 0.273% from its previous closing price. As per ASX, the stock of APT gave an excellent return of over 140% in the past one year and a return of 24.61% in the past 6 months. This resulted the stock to incline towards its 52-weeks’ high level of $ 37.410.


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