If you are looking for 2 quality ASX tech shares to add to your share portfolio, I believe the following are strong candidates.
Here's why they are both in my buy zone right now.
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Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a donor management platform provider for the faith, not-for-profit, and education sectors. This ASX tech share's market niche centres on the medium-to-large church sector of the United States market. Pushpay has been expanding its market presence strongly over the past few years. This has driven a strong increase in its customer base and high recurring revenue growth.
Pushpay saw a 39% increase in total processing volume to US$5 billion for the 12 months to 31 March 2020. Its operating revenue also grew strongly, increasing by 33% to US$127.5 million. This growth was boosted by the acquisition of rival Church Community Builder at the end of last year. What was even more impressive was the increase in Pushpay's gross margin. It was a significant expansion from 60% to 65% in FY 2020.
Pushpay's revenue guidance for FY 2020 ending 31 March is between US$50 million and US$54 million. That's a massive increase of approximately 100% on the prior year.
I'm confident that Pushpay is well positioned to achieve strong revenue growth over the next few years driven by growing market scale efficiencies. As such, despite the considerable increase in the Pushpay share price over the last month, I feel it is a strong ASX tech share to buy and hold.
SEEK Limited (ASX: SEK)
Another ASX tech share that is in my buy zone right now is online employment investment portal, Seek.
The Seek share price was hit hard during the early phase of the coronavirus pandemic. Its share price fell by around 50% between mid-February to late March. However, since then, the Seek share price has recovered most of this loss.
A recent trading update revealed that there has been a trend of improving weekly billings in Australia and New Zealand, since their lows in March and April. Billings in June are still down on the prior corresponding period, however, they are well up on the sharp lows seen in the early phase of the pandemic. Activity for Seek's Chinese operations, Zhaopin, is also trending upwards.
Seek is now forecasting total revenues of approximately $1,575 million for FY 2020. This would be a marginal increase on revenues of $1,537 million in FY 2019. EBITDA for FY 2020 is predicted to decline slightly from $455 million in FY 2019 to $410 million.
I think this is a very solid result if it can be achieved. Despite the short term issues caused by the pandemic, I remain very optimistic about Seek's long term future. I'm confident that the company's dominant and entrenched market position, and growing demand for job ads in its key market, will drive above average market returns over the next five to ten years.
