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2 small cap ASX tech shares to buy now

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Due to the recent weakness in the tech sector, a number of tech shares are trading notably lower than their 52-week highs.

While this is disappointing for existing shareholders, it has potentially created a buying opportunity for the rest of us.

Two small cap tech shares that could be in the buy zone now are listed below. Here’s what you need to know about them:

Nitro Software Ltd (ASX: NTO)

Since peaking at $3.66 last last year, the Nitro share price has been dragged 20% lower. This is despite the company delivering a very strong full year result in February.

For the 12 months ended 31 December, Nitro reported a 64% increase in annualised recurring revenue (ARR) to $27.7 million. This was driven by increasing demand for its popular Nitro Productivity Suite.

Positively, similarly strong growth is expected in FY 2021. Management’s guidance for the year ahead is for ARR in the range of $39 million to $42 million. This will mean year on year growth of 41% to 51.6%.

One broker that appears to see the weakness in the Nitro share price as a buying opportunity is Morgan Stanley. 

Last month it put an overweight rating and $3.70 price target on the company’s shares. This compares to the current Nitro share price of $2.90.

Whispir Ltd (ASX: WSP)

Another small cap ASX tech share that is trading notably lower than its 52-week high is Whispir.

The shares of this growing software-as-a-service communications workflow platform provider reached a high of $5.24 in August. Today, the Whispir share price is trading 36% lower than this at $3.35.

Once again, this is despite the company delivering a very strong result in February. For the six months ended 31 December, Whispir reported a 29.2% increase in its ARR to $47.4 million. This was driven by increased activity from its existing customers and a 12% lift in customer numbers to a total of 707 customers.

Shaw and Partners sees this as an opportunity for investors to invest. Last month it retained its buy rating and lifted its price target to $5.20. It believes the company is well-placed for growth, particularly in the North American market.

Where to 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 are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

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 Whispir Ltd. The Motley Fool Australia has recommended Nitro Software Limited and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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