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That’s why I think these 2 ASX growth stocks are the best purchases in May

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i think that ASX stock growth look really attractive in May 2022. The recent decline and volatility means prices are lower and values ​​look better.

The ASX stock market can sometimes look like a supermarket. There are times when certain products are sold and may seem cheap enough to buy. However, if almost everything sold in the supermarket, I would like to choose my favorite food ideas at the best price.

Translating this into ASX stocks – many ASX growth stocks are much cheaper than they were at the beginning of the year. There are a lot of investments that now look like deals to me. Below are two of my favorites.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is similar to Amazon Australian home goods and furniture. It sells hundreds of thousands of goods. Many of these products are delivered directly by suppliers, which shortens delivery times and reduces the need for Temple & Webster to keep so many stocks.

How much cheaper is the share price of Temple & Webster? In 2022, it decreased by about 60%. But I think now is a really good long-term opportunity.

There is a long-term trend towards increasing the number of online purchases, which I think will benefit businesses over time. It is already claiming to be a leading e-commerce retailer.

I think so compilation business growth is compelling. У four months until April 30, 2022, the company’s revenue grew by 23% over the previous year. This was an increase of 116% compared to 2020.

Increasing revenue and scale will help increase operating leverage, allowing businesses to reinvest for growth in things like marketing, technology development, product range and overall customer experience. The increased scale will also help ASX’s share of growth achieve better unit savings, including cost advantages in product sourcing, logistics and marketing.

With such a low share price of Temple & Webster, I believe the business has a good future.

Cloud accounting software is my other choice for May 2022 (and in the long run).

The ASX doesn’t have many big high-quality stocks. But I think Xero is one of those great names.

It has a very gross profit of 87.3% – it is growing every year. A high gross profit margin means that most of the income is converted into gross profit. This gross profit can be spent on industries that help develop and improve Xero, such as product development, marketing, salaries and so on.

After all, I think a high gross profit margin will allow Xero to generate more net profit after tax (NPAT) if he no longer invests so much in growth.

There are two other things that I really like about this share of ASX growth.

It has a rapidly growing global subscriber base. At the end 22 ф.г., it had 3.3 million subscribers (19% over the year). It is common in places such as Australia, the UK, North America and South Africa. For Xero there is a very large target market.

Another thing I like about Xero is its software as a service (SaaS). It receives monthly income from subscribers, and this allows investors (and management) to easily see what the income may be in the next 12 months.

Xero’s monthly revenue on an annualized basis (AMRR) increased 28% to New Zealand’s $ 1.2 billion in 22 fing. Actual operating income at £ 22 amounted to New Zealand $ 1.1 billion. So there is already some revenue growth over the next 12 months.

But those two shares of ASX growth are not only two, I will gladly go shopping. We’ll take a look at some of my other favorites another time.

https://www.fool.com.au/2022/05/28/heres-why-i-think-these-2-asx-growth-shares-are-top-buys-in-may/

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