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2 highly rated small cap ASX shares that analysts say have huge potential

These small caps could be worth considering after the market selloff…
The post 2 highly rated small cap ASX shares that analysts say have huge potential appeared first on The Motley Fool Australia. –

The small side of the market has been a difficult place to invest this year. Due to a sudden disdain for loss-making tech shares, the market has punished a number of highly promising small cap shares.

While this is disappointing, it could be an opportunity for patient, long-term focused investors.

Here are two small cap ASX shares that brokers rate as buys and are forecasting huge growth in the future:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals.

In addition, the company’s Tradiecore software helps tradies with job management, understanding profitability, and to create a smoother experience for both them and their customers.

Goldman Sachs is a very big fan of Hipages and believes it has enormous potential. In fact, the broker has likened the company to Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA) in the early days.

The broker commented: “In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. […] HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia.”

The broker currently has a buy rating and $2.50 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another small cap that is highly rated is Nitro Software. It is the document productivity software company behind the Nitro Productivity Suite that is driving digital transformation in organisations around the world.

Bell Potter is very positive on Nitro. It currently has a buy rating and $2.50 price target on its shares.

It said: “[Nitro] Remains a key pick despite not reporting last month but looking value for a high quality, mid cap tech stock on FY22 EV/EBITDA and PE ratios of c.22x and 40x and we also expect a good 1HFY22 result in May with, in particular, strong SaaS ARR growth.”

The post 2 highly rated small cap ASX shares that analysts say have huge potential appeared first on The Motley Fool Australia.

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 over ten 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 January 12th 2022

More reading

Analysts say investors should buy these top ASX shares
Why Nitro, PointsBet, Sezzle, and Siteminder shares are racing higher
Nitro share price storms 23% higher on record quarter
Analysts name 3 small cap ASX shares to buy
Goldman Sachs says these small cap ASX shares can double in value

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Nitro Software Limited. 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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