2 growing small cap ASX shares brokers rate as buys

Brokers appear to believe these small cap ASX shares could have bright futures…
The post 2 growing small cap ASX shares brokers rate as buys appeared first on The Motley Fool Australia. –

While small cap shares carry a lot more risk than blue chips, the potential returns on offer are vastly superior. This could make it well worth having a little exposure to this side of the market if your risk tolerance allows.

But which small caps should you be looking at? Two to get better acquainted with are as follows:

Mach7 Technologies Ltd (ASX: M7T)

The first small cap ASX share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps users with their diagnoses, reduces costs, and improves outcomes. 

The company has been growing at a solid rate over the last couple of years thanks to strong demand and the acquisition of Client Outlook for A$40.9 million in June last year. The acquisition of the leading provider of an enterprise image viewing technology has both expanded its offering and also its addressable market considerably.

Management estimates that the company now has a US$2.75 billion market opportunity to grow into. This is significantly more than the total contract value (TCV) of $12.84 million Mach7 generated during the third quarter.

Analysts at Morgans are very positive on the company’s prospects. The broker believes that its solutions are well-placed in the current environment, especially with demand for telehealth growing fast. Morgans currently has an add rating and $1.68 price target on Mach7’s shares.

Whispir Ltd (ASX: WSP)

Another small cap to look at is Whispir. It is a technology company providing businesses with a communications workflow platform that automates interactions between organisations and people. This platform helps businesses of all sizes eradicate communication inefficiencies and redundancies so that their staff and clients can connect in new and productive ways. 

Demand continues to grow for Whispir’s platform and is underpinning solid recurring revenue growth. In fact, its third quarter update revealed further growth in this key metric. As of 31 March, the company’s Annualised Recurring Revenue (ARR) was up 20.3% over the prior corresponding period to $50.3 million. This was also up 5.2% since the end of the second quarter.

Ord Minnett is a fan of the company. Its analysts have a buy rating and $4.25 price target on its shares.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

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3 exciting small cap ASX shares to watch

3 exciting ASX growth shares rated as buys

The post 2 growing small cap ASX shares brokers rate as buys appeared first on The Motley Fool Australia.

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