2 small cap ASX shares that are highly rated

These small cap shares have been tipped to have bright futures…

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While small cap shares carry a lot more risk than blue chips, the potential returns on offer are vastly superior. This could make it worth dedicating a small portion of a portfolio to them if your risk profile allows.

With that in mind, I have picked out two small cap ASX shares that are highly rated. Here’s why they could be worth a closer look:

Doctor Care Anywhere Ltd (ASX: DOC)

Doctor Care Anywhere is a growing UK-based telehealth company that is aiming to deliver high-quality, effective, and efficient care to its patients.

It has been a very strong performer over the last 12 months. This has been driven by the pandemic accelerating the adoption of telehealth services globally.

Pleasingly, even though the worst of the pandemic is behind us and economies are reopening again, the company continues to report solid growth in signups and revenue.

For example, in April, Doctor Care Anywhere released its first quarter update and reported a 16.5% increase in unaudited underlying revenue to 4.4 million pounds (A$6.87 million). This was underpinned by a 14.7% increase in signups to the platform to 500,000 and a 21.9% increase in quarterly consultations delivered to 90,500.

One broker that is a fan is Bell Potter. It currently has a buy rating and $1.95 price target on the company’s shares.

Over The Wire Holdings Ltd (ASX: OTW)

Another small cap share to watch is Over The Wire. It is a telecommunications, cloud, and IT solutions provider,

As with Doctor Care Anywhere, it has been a positive performer in FY 2021. In February, the company reported a 17% increase in revenue to $50.3 million and a 28% jump in EBITDA to $10.5 million.

One key highlight from this result was its recurring revenue. Almost all of Over The Wire’s revenue is now classed as recurring, which gives it a firm foundation to build on in the coming years.

Analysts at Canaccord Genuity are positive on its growth prospects. The broker currently has a buy rating and $4.85 price target on its shares.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Doctor Care Anywhere Group PLC and Over The Wire Holdings Ltd. The Motley Fool Australia has recommended Doctor Care Anywhere Group PLC and Over The Wire Holdings 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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