Recent market volatility has seen the S&P/ASX 200 Index (ASX: XJO) decline by 5.7% over the past few trading days. Despite this downturn, long-term growth opportunities remain compelling for investors. Significant declines in stock prices can offer attractive valuations, often reflected in lower price-earnings (P/E) ratios. This environment may present opportunities for ASX growth stocks to offer potential value.
Here’s a closer look at two ASX stocks that have experienced notable declines recently but present promising prospects for the future:
Tuas Ltd (ASX: TUA)
Tuas Ltd, a telecommunications company focused on Singapore, has seen its share price fall by 10% in recent trading. Despite this drop, Tuas is showing strong underlying growth. The company has been steadily increasing its subscriber base, reaching 938,000 subscribers in the first half of FY24. This represents a year-over-year growth of 35.7% and a half-over-half growth of 14.5%.
Additionally, the average revenue per user (ARPU) has risen from $9.37 per month in FY23 to $9.56 per month in HY24. This combination of subscriber growth and increased ARPU contributed to a 38% rise in HY24 revenue, reaching $54.7 million.
The company’s operating leverage is also evident, with the earnings before interest, tax, depreciation, and amortisation (EBITDA) margin improving to 41% from 36% in the previous period. HY24 EBITDA increased by 56% to $22.4 million. As Tuas continues to grow its subscriber base and potentially expands into other Asian markets, its profit prospects look promising.
GQG Partners Inc (ASX: GQG)
GQG Partners Inc, a major US-based fund manager listed on the ASX, has experienced a 12.2% drop in share price recently. This decline is partly due to the broader market downturn, which impacts the funds under management (FUM) of investment firms.
Despite this, GQG presents an interesting opportunity. Historically, fund managers can benefit from market recoveries, which often lead to significant growth in FUM. GQG has a strong track record, with its main funds consistently outperforming their benchmarks since inception.
The company continues to attract new investments, with net inflows of US$6.5 billion in the three months to 30 June 2024. GQG anticipates continued positive flows in 2024 and has a solid pipeline of potential new FUM.
Both Tuas Ltd and GQG Partners Inc, despite recent declines, exhibit strong growth potential and solid fundamentals. Investors looking for opportunities amidst the current market volatility may find these stocks worth considering.