Here’s why I think Bigtincan Holdings Ltd (ASX:BTH) and this small cap ASX share could be stars of the future…
The post These exciting small cap ASX shares could be stars of the future appeared first on Motley Fool Australia. –
If you’re looking to add a bit of exposure to the small side of the market, then you might want to take a look at the small cap ASX shares listed below.
Here’s why I think they could be destined for big things in the future:
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a fast-growing provider of enterprise mobility software. This software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. It has been a strong performer over the last couple of years and continued this positive form in FY 2020 despite the pandemic.
For the 12 months ended 30 June 2020, Bigtincan reported revenue growth of 56% to $31 million and annualised recurring revenue (ARR) growth of 53% to $35.8 million. Pleasingly, more of the same is expected in FY 2021. Management provided ARR growth guidance of 36.9% to 48% year on year. This is still only a fraction of its overall market opportunity.
ELMO Software Ltd (ASX: ELO)
Another small cap ASX share to look at is ELMO Software. It is a fast-growing cloud-based human resources and payroll software company. It provides businesses with a unified software platform, which allows them to streamline a range of key processes. This includes everything from onboarding, training, payroll, and performance management.
I like ELMO due to its sizeable opportunity in the ANZ market and its option to expand internationally in the future. The latter is thanks to its jurisdiction agnostic platform. Another positive is that ELMO undertook a capital raising this year to fuel its future growth. Management intends to use the majority of its sizeable cash balance (~$140 million) to acquire complementary businesses. But even without these acquisitions, the company is forecasting further strong organic growth in FY 2021. It has provided guidance for ARR of $65 million to $70 million, which represents year on year growth of 18% to 27%.
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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 BIGTINCAN FPO and Elmo Software. The Motley Fool Australia has recommended BIGTINCAN FPO and Elmo Software. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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