It is nearly the end of 2023, and so it is time to share our best ASX stocks for 2024! In coming to these conclusions we have considered each companies’ resilience to the difficult market conditions, their market opportunities and future potential. Without any further ado, here they are!
Our 5 best ASX stocks for 2024
This stock is one of the best ways to play the growth of the Cloud. As we’ve noted before, the transition is still in early days, with spending on enterprise IT revenues easily dwarfing Cloud revenues. ReadyTech provides SaaS technologies in Australia and operates in three segments: Education, Workforce Solutions and Government and Justice – which also explain its end markets.
The company listed on the ASX in 2019 at $1.50 per share. Although it is off its all-time highs, it is still well ahead of its IPO price. Not bad considering the Tech Wreck and the disruption of a takeover offer that was ultimately rejected by shareholders. Analysts have set a 12 month target price of $4.29, a premium of over 20% to the current price. They expect revenue growth of 18% and the company’s profit to more than double in FY24.
Weebit Nano (ASX:WBT)
We know the semiconductor space is volatile, but Weebit is ideally positioned for a strong 2024. Weebit has spent several years developing a Non-Volatile Memory technology called Resistive Random Access Memory (ReRAM) that has strong potential to replace Flash memory technology, among other things.
The company is expecting to report its first revenues in February 2024 after its technology was commercialised with SkyWater. There’ll be plenty more news flow with the potential for more commercial partners to come onboard and for the technology to continue to be developed, particularly to be made available in smaller geometries (an essential step given how small electronic devices are becoming).
You can read more about Weebit here!
CSL is the ASX’s largest healthcare stocks and market darlings. Well, at least it was until a profit downgrade in mid-June. Shares appear to have bottomed out and are recovering since an Investor Day held in late October. It does not appear that anything new was announced, although reiterating how solid a business it was surely hasn’t hurt. It is the number 1 business in plasma protein therapies and iron deficiency as well as second in influenza vaccines
Consensus estimates (among 18 analysts) expect 10% revenue growth, 27% EBITDA growth and 25% EPS growth in FY24. Looking ahead to FY25, 9% revenue growth, 13% EBITDA growth and 21% EPS growth. And the median target price is A$308.63 per share – a ~16% premium to the current price. Its P/E isn’t low by any means, at 29x for FY24, but perhaps you might be getting what you pay for.
Breville is categorised as a ‘consumer discretionary’, but we think it is fair to say it is less discretionary than some others. This company is a premium kitchen appliances business with a presence in Australia, Europe and the Americas. Breville sells over $1.4bn in goods each year in over 100 countries globally and caters to middle to higher income earners.
Consensus estimates call for 8% revenue growth, 9% EBITDA growth and 10% profit growth in FY24. For FY25, analysts expect 10% revenue and EBITDA growth and 14% profit growth. Where will this come from, investors might ask? From further international expansion as well as the end of the rate hike cycle.
Light & Wonder (ASX:LNW)
This stock might be the best way to play the US gambling market with PointsBet out of the picture. Yes, we know it is a big market opportunity that is still opening up. At the same time, the market is highly competitive and there is little difference between gambling companies. Light & Wonder is different because it is not just a betting game provider, it makes gaming games and other technologies that are picked up by providers themselves.
Looking ahead to CY24, analysts expect $3.1bn in revenue (up ~10%) and a $321m profit (nearly double the year before). In CY24, $3.3bn in revenue (up 6%) and a $432m profit (up 35%). The company’s P/E for CY24 is 25.3x. This may seem high for an ASX stock, but not for a US stock. If you believe consensus estimates, it is trading at a PEG of barely 0.3x.
Disclosure: Stocks Down Under directors own shares in WBT.
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