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Are Nearmap and Webjet shares bargain buys?

James Mickleboro
is it a buy

If you’re looking to add a few growth shares to your portfolio, then I think the two shares listed below could be good options right now.

Both have come under pressure recently and are trading at a fraction of the price you’d have paid at the turn of the year.

Here’s why I think they could be in the buy zone:

Nearmap Ltd (ASX: NEA)

On Thursday the Nearmap share price crashed a massive 30% lower following a surprise downgrade to its FY 2020 guidance. The aerial imagery technology and location data company now expects its annualised contract value (ACV) to be in the range of $102 million to $110 million. This is down from its original guidance of $116 million to $120 million. This represents a 12% reduction to its original guidance range at the low end and an 8% reduction at the high end. I think this makes its 30% decline an overreaction. Especially given that its shares were already trading significantly lower over the last few months. In addition to this, I expect downgrades like this will become rarer as it scales and feel its long-term growth prospects are still very positive.

Webjet Limited (ASX: WEB)

After being one of the best performers on the S&P/ASX 200 in 2020, in the space of just a few days the Webjet share price is now amongst the worst performers. The online travel agent’s shares have fallen 8% since the turn of the year. This has been driven by concerns over the impact of coronavirus on the travel industry and a broker note out of Morgan Stanley. That broker suggested that Google Travel could be disrupting its B2C business. This led it to downgrade its shares to an underweight rating and slashed the price target on them to $10.00. While I agree that Google is a threat to its B2C business, I continue to believe its B2B business will be the key driver of growth in the future. In light of this, I think this selloff is a buying opportunity for investors.

The post Are Nearmap and Webjet shares bargain buys? appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020