Leading investment experts have identified some ASX shares with lots of growth potential after being heavily sold off.
It has been a difficult period for businesses that are known for growing at a faster rate.
There is increased market concern about what the elevated inflation rate will mean for interest rates. The US interest rate is expected to increase significantly in 2022.
Here are two beaten up ASX shares the experts reckon have big upside potential.
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Hub24 Ltd (ASX: HUB)
The Hub24 share price has fallen almost 17% this year to date, despite the ongoing growth of the business.
Hub24 is one of the larger fintechs on the ASX. It operates a few different businesses including the Hub24 platform, the Xplore platform and Class. The ASX share says the Hub24 platform offers advisers and their clients a range of investment options, including managed portfolios and enhanced transaction and reporting functionality.
The company continues to deliver growth. In its update for the three months to 31 March 2022, its platform net inflows were $2.6 billion, an increase of 36.4%. The financial year-to-date net inflows to 31 March 2022 were $9.3 billion.
At 31 March 2022, Hub24 had total funds under administration (FUA) of $68.3 million, including $51 billion of platform FUA – that was up 43.3%. The company also said that the Hub24 platform was ranked first for adviser advocacy by Adviser Ratings.
Broker Credit Suisse currently rates the ASX share a buy. The Hub24 share price target is $36 by the broker. That implies a potential rise of almost 50% over the next year if the broker is right.
Temple & Webster Group Ltd (ASX: TPW)
The Temple & Webster share price has dropped around 40% since the beginning of 2022. This business is an online-only retailer of furniture and homewares.
However, unlike some other ASX online retail shares, the e-commerce ASX share hasn't reported a sales decline.
In the first few weeks of the second half of FY22 to 6 February 2022, the ASX share saw revenue grow by another 26%. Growth on growth can lead to much bigger numbers after a few years, thanks to the power of compounding.
Temple & Webster is investing its revenue into several areas to keep growing. It's spending on marketing, investing in technology, expanding its private label brand and increasing its operational efficiencies. The company says that increased scale will help with better unit economics.
One of the company's selling points for customers is its augmented reality technology, which allows customers to 'see' a product in their space.
The ASX share sees potential for growth in the home improvement segment, selling things like paint supplies, flooring, garden and landscaping, tools and equipment, plumbing fixtures and so on. Temple & Webster says that this is a $16.4 billion market opportunity, with less than 5% of the home improvement sector having gone online.
It's currently rated as a buy by Credit Suisse. The Temple & Webster share price target is $13.54. That implies a potential upside of more than 110%. It thinks it can continue to capture a growing market share.
