I really like a number of ASX growth shares which seem as though they can deliver a lot of growth in the long-term because of the compounding effects year after year.
Over the next few years I reckon both of the below companies could achieve strong revenue and profit growth.
Volpara Health Technologies Ltd
(ASX: VHT)
Volpara seems like one of the most exciting ASX healthcare shares with how quickly it’s expanding.
In the June quarter, which is Volpara’s FY24 first quarter, cash receipts increased by 21% in same foreign currency exchange rate terms to NZ$11 million. In that same quarter, its net operating cash flow improved by NZ$2.8 million, to the point where it was operating cash flow positive. That’s a good sign for shareholders that profit is about to soar.
The company said it’s heading towards being net operating cashflow positive in FY24, which is a year ahead of guidance.
It’s generating attractive recurring revenue – annual recurring revenue (ARR) has reached US$21.5 million.
With a gross profit margin of above 90%, the revenue growth is a big boost for the ASX growth share to spend on expansion, or for boosting profit.
Vaneck Morningstar Wide Moat ETF (ASX: MOAT)
This is one of my favourite exchange-traded funds (ETFs) because of how strongly it manages to consistently perform due to the investment process.
In the past three years it has returned an average of 17.7% per year and it’s done an average of around 16% since June 2015.
The idea is that there’s “a focus on quality U.S. companies Morningstar believes possess sustainable competitive advantages, or ‘wide economic moats’. This means that the companies have something like a patent or the lowest costs, giving them an advantage over competitors to win customers.
The other element of the investing is that they’re trading at attractive prices – “targets companies trading at attractive prices relative to Morningstar’s estimate of fair value”.
If I had to guess which ETF is most likely to deliver a net return of at least 10% per annum over the next five years, it would be this ASX growth share.
