There are some outstanding ASX tech shares out there that could be worth buying for the long-term.
If I were given $1,000 to invest in an ASX tech share, I’d be very happy to buy one of these ideas:
Adore Beauty Group Ltd (ASX: ABY)
Adore Beauty is a leading e-commerce beauty product business. It’s growing revenue at a good pace and I think it can keep compounding strongly over the rest of this decade.
FY22 half-year revenue rose 18% to $113.1 million, with a 2-year compound annual growth rate of 47%. In other words, it’s growing at a pleasing rate.
I think this ASX tech share is one of these types of businesses that can become a clear category leader as it keeps investing in its business, expanding its range and delighting customers. One of the underrated things about Adore Beauty’s future is that it’s looking to launch its own private brand products, which will come with better margins.
While operating profit margins are low for now, it can benefit from substantial operating leverage in the future when it’s no longer investing heavily for growth. The gross profit margin does keep rising, in HY22 the gross profit margin went up 0.6 percentage points to 33.1%.
Xero Limited (ASX: XRO)
Xero is a leading cloud accounting software company. It’s one of the ASX’s biggest technology businesses and perhaps one of the best overall.
One of the main reasons that I like Xero so much is its global growth outlook. The ASX tech share is growing in numerous places including Australia, the UK, South Africa, Singapore and so on. I believe that Canada could become another strong market for the business.
Xero has one of the best gross profit margins on the ASX. The Xero gross profit margin was 87.1% in the first half of FY22. This allows the business to reinvest a very high level of its new revenue for further growth. HY22 revenue increased another 23% to $505.7 million.
The Xero share price has fallen by more than 30% in 2022, so it could be a great time to consider the business for a long-term investment.
Betashares Global Cybersecurity ETF (ASX: HACK)
This investment isn’t one business, but it’s an exchange-traded fund (ETF) that owns 41 businesses that are known as cybersecurity leaders.
Some of the names in the portfolio include Crowdstrike, Palo Alto, Cloudflare, Cisco Systems, Zscaler, Splunk, Akamai Technologies, Booz Allen Hamilton, Juniper Networks and Mandiant.
I’m not a cybersecurity expert, but it seems the world needs ever-improving digital defences to stop the bad guys from stealing data and other important digital things.
I think that businesses, governments, individuals and so on will continue paying for cyber protection. Even if a recession were to happen, I’d still want to ensure the company’s digital infrastructure was protected. So, I think the HACK ETF has both defensive and growth qualities. This ASX tech share looks promising to me.