2 exciting small cap ASX shares to watch

Volpara Health Technologies Ltd (ASX:VHT) and this ASX small cap share could be worth watching closely in 2021…

| More on:
Woman in pink sweater lying on dock with binoculars to her eyes

Image source: Getty Images

As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.

Two small cap shares that could be deserving of a spot on your watchlist are listed below. Here’s what you need to know about them:

IntelliHR Ltd (ASX: IHR)

The first small cap to look at is IntelliHR. It is a cloud-based human resources and people management platform provider.

IntelliHR has been growing at a very strong rate this year. During the first five months of FY 2021, the company delivered a sizeable 148% increase in subscriber numbers to over 30,000 contracted subscribers.

This strong customer growth has translated into strong recurring revenue growth so far in FY 2021. As of its last update, IntelliHR’s contracted annual recurring revenue (ARR) was up 81.3% to $2.8 million.

Management appears confident there will be more of the same in future thanks to its quality software, international expansion, and favourable industry trends. It notes that the company is well-placed in a high growth global market being disrupted by the Working-from-Home trend.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap to look at is Volpara. It is the New Zealand-based healthcare technology company behind the VolparaEnterprise software solution.

This product is a cost-effective, mission-critical tool that helps clinics deliver the highest-quality breast imaging services. In addition to this, the company has a growing number of add-on solutions that work with VolparaEnterprise.

These add-ons are expected to drive material average revenue per user (ARPU) growth in the future. At the end of the first half, the company’s ARPU stood at US$1.16. However, management is aiming to grow this to US$10 in the future through its full product suite.

One broker that is a fan of Volpara is Morgans. It currently has an add rating and $1.71 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 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

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 VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Speculative