If you’re wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look. All three have been tipped for big things in the future.
Here’s why these small cap ASX shares could be worth adding to your watchlist:
Adore Beauty Group Limited (ASX: ABY)
The first small cap to watch is Adore Beauty. It is a leading online beauty retailer which has been growing strongly. This has been underpinned by a significant lift in customer numbers thanks to the shift online. And as this shift is only really getting started in the beauty category, Adore Beauty appears very well positioned for growth over the long term.
Earlier this week Morgan Stanley put an overweight rating and $6.00 price target on its shares. It believes the company can grow strongly over the medium term.
Over The Wire Holdings Ltd (ASX: OTW)
Another small cap ASX share to add to your watchlist is Over The Wire. It is a telecommunications, cloud, and IT solutions provider that has a national network with points of presence in all major Australian capital cities. It offers a range of products and services to businesses including data networks and internet, voice, hosting and security, and managed services. In FY 2021 Over The Wire reported a 29% lift in revenue to $112.7 million and a 36% jump in EBITDA to $23.5 million.
Ord Minnett was pleased with its performance and expects more of the same in FY 2022. In response, it retained its buy rating and lifted its price target to $5.06.
Volpara Health Technologies Ltd (ASX: VHT)
A final small cap ASX share to watch is Volpara. It is a growing MedTech software as a service company and the provider of breast imaging analytics and analysis products. These products improve clinical decision-making and support the early detection of breast cancer. Demand for its offering has been growing strongly, leading to annualised recurring revenue (ARR) rising to NZ$27.8 million this year. However, this is still only a fraction of its US$750 million addressable market in just breast cancer screening.
Morgans currently has an add rating and $1.87 price target on the company’s shares.