2 exciting small cap ASX shares to watch

Here’s why Nitro Software Ltd (ASX:NTO) and this small cap ASX share could be ones to watch very closely right now…

| More on:
ASX share price on watch represented by man looking through magnifying glass

Image source: Getty Images

Are you looking for some small cap ASX shares to add to your watchlist this month? Then you might want to take a look at the ones listed below.

Here’s why they could be worth keeping a close eye on:

Audinate Group Limited (ASX: AD8)

The first small cap ASX share to watch is Audinate. It is a digital audio-visual networking technologies provider best known for its industry-leading Dante audio over IP networking solution.

This solution is dominating the competition and is expected to continue doing so for the foreseeable future. In fact, as we covered here earlier this week, one fund manager believes Audinate has the potential to be an unregulated monopoly.

Positively, after being disrupted by the COVID-19 pandemic, demand has started to rebound strongly for the company’s offering. This led to Audinate reporting its highest ever quarterly revenue last month.

UBS is a fan of the company. Last month it responded to its third quarter update by putting a buy rating and $10.40 price target on its shares. This compares to the most recent Audinate share price of $7.94.

Nitro Software Ltd (ASX: NTO)

Another small cap to watch is Nitro Software. It is a software company aiming to drive digital transformation in organisations around the world.

Its key solution is the Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools. Demand continues to grow for the solution, underpinning strong recurring revenue growth.

For example, in FY 2021, the company is guiding to annualised recurring revenue (ARR) of $39 million to $42 million. This represents year on year growth of 41% to 51.6%.

Morgan Stanley is positive on the company and recently reaffirmed its overweight rating and $3.70 price target on its shares. This compares to the latest Nitro share price of $3.00.

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 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 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 May 24th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. 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 Bruce Jackson.

More on Small Cap Shares