Buy Hold Sell: 5 ASX innovators with massive potential

It's September, and that means football finals - time to separate the contenders from the pretenders, as they say. 

It's no different when hunting for opportunities on the ASX, particularly when it comes to the innovators - those companies pushing boundaries, reshaping industries, and trying to become the market leaders of tomorrow. 

But as every investor knows, backing innovation isn’t as simple as spotting a good idea. For every success story like Pro Medicus or Life360, there are countless others that never quite make the leap, leaving investors nursing losses. 

So how do you tell the difference between a genuine innovator and a pretender? And what signals should investors look for when trying to back the next big thing? 

To answer those questions, Lvewire's Chris Conway is joined by Martin Hickson from 1851 Capital and Steve Johnson from Forager. Together, they run the ruler over a handful of ASX innovators. 

For good measure, each guest shares a disruptor they are backing that has massive upside potential - provided they can nail it. 

Please note this episode was filmed on 10 September 2025.

Other ways to listen

• Podbean
• Spotify

Edited Transcript

Chris Conway: Hello and welcome to Livewire's Buy Hold Sell. My name is Chris Conway. Investing in innovators, it's easier said than done. For every Pro Medicus or Life360, there are plenty that don't make the cut. So how can investors separate hype from reality? Well, I've got two pros here to help me answer that exact question, in Steve Johnson from Forager and Martin Hickson from 1851 Capital. We're going to start strong, Guzman y Gomez, the seller of Mexican food here in Australia. Steve, I'm going to come to you first. Is this a buy, hold, or sell?

Guzman y Gomez (ASX: GYG)

Steve Johnson (SELL): It's a sell for me. It is an innovative business, that's for sure, and I'm actually a fan of the product. I just think the market cap here is way, way too big for the opportunity that's in front of it, and it is a notoriously competitive, difficult space. They're an innovative business today. I can promise you there's another innovative business coming in the space tomorrow.

Chris Conway: No doubt. It was down 41% or it is down, I should say, 41% year to date. It had a bit of a shocker through reporting season. Martin, is there any value there? Buy, hold, or sell?

Martin Hickson (HOLD): I've gone with a hold. I think it's a great product, great company. As you mentioned, the share price is almost half this calendar year to date. Looking at the valuation, it still doesn't screen as cheap, trades on a PE north of 100 times, but it does have a great management team led by Steve Marks and Hilton Brett co-CEOs.

As you mentioned, the stock sold off post-August reporting season. Like-for-like sales in that first seven-week period were up 3.7% - below what the market was expecting. But I think that over the next six months, if they can start growing their like-for-like at a faster rate again and continue increasing their margins, I think the share price can claw back some of that lost ground. So I think it's a hold at the moment.

Catapult Sport (ASX: CAT)

Chris Conway: Next up, we'll talk Catapult Sports, the sports equipment maker, famous for the GPS tracking software originally. Martin, I'll stay with you. Buy, hold, or sell on this one?

Martin Hickson (SELL): I've gone for a sell on Catapult and maybe that's just because we're jaded. We don't own shares in the company. We met the management team 12 months ago and didn't buy and they've done a fantastic job growing their athlete tracking software. They've moved into video as well, so they've done a great job over the last 12 months. The share price has tripled, now has a market cap north of $1.5 billion. It's only just profitable, so it is quite expensive. So at the moment, we think it's a sell.

Chris Conway: Up 181% in the last year, I imagine this guy (pointing to Steve) has got a smile on his face, because I know he is held it for a while. I actually spoke to the CEO, Will Lopes, in May this year as well. Pretty compelling story. Steve, I think I might already know the answer to this one, but buy, hold, or sell for you?

Steve Johnson (BUY): I've probably got the opposite problem from Martin. It's done well for us and I am still saying buy on the stock. I will caveat that by saying - for some of the reasons Martin has talked about - we have cut our weighting here quite substantially. This stock was 10% of our portfolio at one point, it's about 3% of our portfolio now. And the only reason it's 3% is because I think this business can grow a lot for a very long time and I think the incremental economics of what they are doing are very, very strong.

A new management team has come in. They promised the market three years ago that, and this had been their problem, that they were growing but not generating any profits. They promised the market three years ago that every dollar of revenue that we add here, you are going to see 50% of that. There's incremental profitability and they've been doing that really consistently.

And I think on the innovation front, the adjacencies here are really obvious to me. They just bought a gym business. There is a lot more they can do in sport if they can become that platform for these professional sporting teams. There's lots of other software that you can plug in.

Zip Co (ASX: ZIP)

Chris Conway: Next up, we'll talk about buy-now-pay-later company Zip Co. Steve, I'm going to stay with you here, buy, hold, or sell?

Steve Johnson (HOLD): Probably at the opposite end of the spectrum on this one. It's one that we've missed and I think it's one that we could have found so a bit frustrating, but similarly, the share price is up a very, very long way over the past couple of years. I'm going to actually say hold, because I think what they're doing in the US is very impressive and it's a huge market. So unlike when you've got a growing business in Australia, the limits on how big this business can grow are much higher. So I wouldn't want to be on the short side of a trade in the stock and I'll say hold.

Chris Conway: Steve, you're not wrong, up 106% in the last 12 months alone. It actually had a cracking reporting season. I think it was up 20%-odd on the day. Martin, buy, hold, or sell for you?

Martin Hickson (BUY): Zip is a buy. It's our largest position in the fund at the moment. The CEO, Cynthia Scott, has done a fantastic job since she joined the business just under four years ago. She's cut costs, sold underperforming assets and refocused the business on the US. The US now makes up 80% of the company's earnings.

Still in the early days of taking share and buy-now-pay-later, it's 2% of e-commerce sales in the US versus 15% in Australia. Bad debts are under control. TTV is growing at 45% plus. We think the recent deals with Google and Stripe can accelerate that growth over the next six months and the share price has done well, but we still think there is a lot of upside for Zip, so it's a buy.

Guest picks – innovators with big upside potential

Chris Conway: My favourite part of Buy Hold Sell, I've asked the gents to bring along an innovator or disruptor with massive upside potential, but only if they can nail it. Martin, I'll stay with you. What have you got for us?

EROAD (ASX: ERD)

Martin Hickson: I've gone with EROAD. So it's a New Zealand based technology company, focusing on the transport analytics space. They operate in New Zealand, Australia and the US. There's a couple of key regulatory tailwinds at the moment that we think can further drive profitability for that particular company. The first is in the US, the government there is introducing road user charges for all vehicles. So EROAD currently has a contract for commercial vehicles in New Zealand, so we think that they're well-placed to potentially win that further contract. It will increase their revenue in New Zealand.

And then in Australia, the government is talking about introducing road user charges for EV. So another significant opportunity for EROAD. $400 million market cap, it's just gone cashflow positive, so we think there's still a further upside for EROAD. So it's a buy.

Chris Conway: Pretty spicy. Steve, can you top that? What have you got?

Plenti (ASX: PLT)

Steve Johnson: Spicy as well. A stock that we own called Plenti. This is a non-bank lender and that non-bank lender space has been taking a lot of share from the big banks for a whole variety of reasons, but Plenti's pitch has always been it's got this software platform that is more efficient, does business better and that's why they're going to succeed.

It has been quite an asset-heavy business. Lending money requires capital and that has constrained it. They did a deal with NAB 12 months ago to do the auto-lending business for NAB. NAB doesn't actually have an auto-lending product. They're now using Plenti's platform. I think this is the real test for this company. Have you got a platform here that works? And if you can sell that without having to provide the capital, you've got a really interesting attractive business. So very interesting 12 months ahead for Plenti and I think it's very reasonably priced even on what they're doing at the moment.

Chris Conway: There you have it, ladies and gentlemen, two pretty hot ideas. Thanks to Steve Johnson and Martin Hickson. If you enjoyed this episode of Buy Hold Sell, make sure to give it a like and don't forget to follow our YouTube channel. We're adding lots of great content every single week.