I Think These 2 ASX Growth Stocks Are October Buys

I think there are plenty of ASX growth stocks that now seem to have good value after a sharp market dislocation in 2022.

When interest rates rise, it can have the effect of driving stock prices down, as the risk-free rate that investors can get from safe assets, namely government bonds, has increased. This means stocks look less attractive.

The great thing about this is that potential buyers of ASX growth stocks can now get them at a much cheaper price.

Xero Limited (ASX:XRO)

Xero is a leading software provider for small and medium businesses – it delivers accounting software and other business software from a wider ecosystem with both its own software offerings and vendors third.

I like that the company is investing heavily in growth by devoting about a third of its operating revenue to product design and development, with a particular focus at the moment on product localization, which suggests that the growth share of the ASX can capture additional market share. in countries like the UK, Canada and South Africa.

The company continues to grow its average revenue per user (ARPU) and subscribers each year, resulting in rapid growth in the total lifetime subscriber value of Xero. FY22 was a good demonstration of that.

Some of the most attractive features of Xero are its very high gross profit margin and very high subscriber retention rate.

I think the company’s long-term focus will help it grow into a much bigger company than it is today, after dropping around 50% in 2022.

Volpara Health Technologies Ltd (ASX:VHT)

Another top ASX growth stock is Volpara in my opinion. It offers software related to breast cancer screening, practice administration and risk analysis.

Its main market is the United States where it has captured a market share of approximately 33% of American women who undergo breast screening. This means that at least one of its various products is used in the images. I think there’s a lot of growth potential here because it’s able to increase its ARPU where it sells more software to practices. A big area of ​​focus is risk analysis, where she aims to help women as early as possible, giving them the best chance of success.

Another area of ​​interest for the company is its low exposure to lung cancer screening. It doesn’t get as much attention as breast cancer screening, but management believes it has just as much long-term market potential.

Volpara also has a very high gross profit margin, over 90%, so if it can just grow its revenue at a good pace, it can quickly become a bigger and more profitable business. It aims to break even cash flow as quickly as possible.

About Joel Simmons

Check Also

Matterport: Still too early to hunt (NASDAQ:MTTR)

courtneyk/E+ via Getty Images Matterport (NASDAQ: MTTR) has a bright future in spatial data reshaping …