3 small cap ASX shares to watch

Keep an eye on these small cap shares…

| More on:
asx share price on watch represented by group of prople all looking through magnifying glasses

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.

Three small cap shares that could be worth adding to your watchlist are listed below. Here’s what you need to know about them:

Avita Medical Ltd (ASX: AVH)

The first small cap ASX share to look at is Avita Medical. It is a global regenerative medicine company best known for its Recell system. This is a spray-on skin treatment used for burns victims. It is also looking to use its system to treat vitiligo and is working on a project with Houston Methodist Research Institute on reversing cellular ageing. Bell Potter is positive on the company. It has a speculative buy rating and $9.80 price target on its shares.

Damstra Holdings Ltd (ASX: DTC)

Another small cap to watch is Damstra. It is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. It recently reported that annual recurring revenue (ARR) reached $35 million at the end of June. This was up 65% over the prior corresponding period. Pleasingly, this is still only a small slice of its total addressable market (TAM). Management estimates that its TAM will be worth US$20 billion by 2022. In response to its update, Shaw and Partners retained its buy rating and $1.88 price target.

Mach7 Technologies Ltd (ASX: M7T)

A final small cap ASX share to watch is Mach7. It is a medical imaging data management solutions provider that allows users to create a clear and complete view of the patient. Users then use this to help them inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. Demand for this type of software continues to grow thanks to industry tailwinds such as telehealth. The company estimates that its TAM is currently US$2.75 billion. This is materially more than the annual revenue of $19 million and $19.5 million it expects to report in FY 2021. Morgans is a fan of the company. It currently has an add rating and $1.56 price target on the company’s 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 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 August 16th 2021

Motley Fool contributor 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 has recommended Avita Medical Limited, Damstra Holdings Ltd, and MACH7 FPO. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia has recommended Avita Medical Limited and MACH7 FPO. 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