What's better than buying ASX growth shares? Investing in them after they've suffered a large decline, at much better value.
It can make a big difference to invest in high-growth businesses when they sell off because of the much bigger change in the price/earnings (P/E) ratio.
For example, if a business with a P/E ratio of 10 falls by 10%, the ratio drops to 9. If a business had a P/E ratio of 50 and it fell by 10%, the P/E ratio would become 45.
With that in mind, the two businesses below look like great value to me.
REA Group Ltd (ASX: REA)
REA Group is the leading property portal company in Australia, with its realestate.com.au business, which sees significantly more visitors than competitors in terms of both property vendors and potential buyers. This market strength allows the business to charge more than rivals and increase prices regularly.
With Australia's growing population and increasing number of properties, the company's addressable market is steadily growing. The recent (and potential upcoming) RBA rate hikes may lead to an increase in property listings, which could boost earnings
The potential of AI hurting the ASX growth share's earnings is not as strong as the market has priced in, in my view, as AI could assist REA Group's earnings in a variety of ways on both the income side and the expense side. Plus, AI adoption by households may not become as widespread as expected (if that ends up being a headwind).
After falling around 40% since August 2025, the REA Group share price is now valued at 33x FY26's estimated earnings, according to CMC Invest.
Siteminder Ltd (ASX: SDR)
Siteminder is another technology company, it provides software for hotels for their operations and to generate revenue through room sales and distribution.
The company has a really impressive goal of 30% annual revenue growth, which most businesses would be very happy with. Not only is the company winning more hotel customers, but it's unlocking more revenue from existing clients by providing more modules.
These additional offerings allow the hotel to analyse their data and finances more effectively so they can decide what price to charge for their rooms. Siteminder can even change the hotel's room prices automatically for them.
The operating leverage of a software business means that costs don't grow at the same speed as revenue, so I'm expecting Siteminder to see its various profit margins (and bottom line) to improve significantly in the next few years.
Following the Siteminder share price's decline of 60% in the past six months, it now looks very good value to me. According to the projection on CMC Invest, it's valued at 24x FY28's estimated earnings.
The post 2 ASX growth shares to buy now while they're on sale appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has positions in SiteMinder. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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