2 growing small cap ASX shares to watch

These ASX small cap shares could be ones to watch…

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Investing in the small side of the share market carries significantly more risk than other areas.

However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio.

With that in mind, here are two small cap ASX shares that could be worth watching closely:

BlueBet Holdings Ltd (ASX: BBT)

The first small cap share to watch is BlueBet. It is a mobile-first online wagering provider. BlueBet allows users to bet on all Australian and international racing and sports through its website and app.

The company has been growing very strongly over the last 12 months thanks to the increasing popularity of mobile sports betting.

For example, in FY 2021, the company outperformed its prospectus forecasts with an 83.3% increase in turnover to $344.7 million and a 48.4% lift in underlying EBITDA to $7.5 million. This was underpinned by a 45.7% increase in active customers to 32,472.

Positively, management is confident that this trend can continue and believes it is well positioned to substantially grow its share of the market in Australia and expand into the massive US market.

Morgans is very positive on the company’s long term growth prospects. As a result, it recently put an add rating and $2.57 price target on its shares.

Mach7 Technologies Ltd (ASX: M7T)

Another 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.

This was evident in FY 2021, with the company reporting a 95% increase in sales orders (total contract value) to $25.6 million. This is still well short of its estimated total addressable market of US$2.75 billion.

Morgans is also a fan of the company and believes it is well-placed to deliver strong revenue growth in the coming years. The broker currently has an add rating and $1.56 price target on the company’s shares.

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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 MACH7 FPO. The Motley Fool Australia has recommended BlueBet Holdings Ltd and MACH7 FPO. 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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