Could these ASX small cap healthcare shares follow in the footsteps of CSL Limited (ASX:CSL)?
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The Australian share market is home to a number of world class healthcare companies with long, proud histories like CSL Limited (ASX: CSL).
In addition to this, it is home to a number of exciting healthcare companies that are just beginning to write their stories.
While there certainly is still a lot of work to do, two that have been tipped for big things are listed below. Here’s what you need to know about them:
Mach7 Technologies Ltd (ASX: M7T)
The first small cap healthcare 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 inform diagnosis, reduce care delivery delays and costs, and ultimately improves patient outcomes. The company has also expanded its offering this year with the acquisition of Client Outlook. It is a leading provider of an enterprise image viewing technology. This acquisition increases Mach7’s total addressable market from US$0.75 billion to US$2.75 billion.
Analysts at Morgans are very positive on the company’s prospects and have been pleased with the acquisition and integration of Client Outlook. Morgans notes that the company’s solutions are well-placed in the current environment where demand for telehealth is growing fast. The broker has an add rating and $1.49 price target on the company’s shares.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara Health Technologies is a growing healthcare technology company that offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Volpara’s software uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. According to management, the company currently has a US$750 million annual recurring revenue (ARR) opportunity in breast cancer screening. This compares to the ARR of NZ$19.9 million it recorded in the first half of FY 2021.
Morgans is also positive on Volpara. It has an add rating and $1.71 price target on the company’s shares. The broker has been pleased with its market share gains, growing SaaS revenue, and high gross margins.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends CSL, MACH7 FPO and VOLPARA FPO NZ. The Motley Fool Australia has recommended MACH7 FPO and VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.