As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.
Two small cap shares that could be worth watching closely are listed below. Here’s what you need to know about them:
BlueBet Holdings Ltd (ASX: BBT)
The first small cap ASX share to watch carefully is BlueBet. It is a mobile-first online wagering provider. It allows users to bet on all Australian and international racing and sports through its website and app. BlueBet has been growing very strongly thanks to the increasing popularity of mobile sports betting.
The good news is that the company still has a long runway for growth in both the Australian market and the enormous US market. And while the latter will be a tough nut to crack, BlueBet is forming partnerships with industry players in an attempt to gain access.
The team at Morgans are very positive on BlueBet. So much so, they have an add rating and lofty $2.57 price target on its shares.
The broker commented: “We remain attracted to BBT’s opportunity to increase its Australian market share (currently just ~1.2%) and significant, long-term growth potential from its US market entry.”
Over The Wire Holdings Ltd (ASX: OTW)
Another small cap to watch is Over The Wire. It is a one-stop-shop for information technology and telco services including data networks, VoIP, hosting, security, and support.
Over The Wire has been growing at a strong rate in recent years and this continued in FY 2021. For the 12 months ended 30 June, the company reported a 29% lift in revenue to $112.7 million and a 36% jump in EBITDA to $23.5 million.
A big positive from the result was that almost all of Over The Wire’s revenue is now recurring. This gives the company a firm foundation to build on in FY 2022 and the years that follow. In fact, management is targeting organic growth of 15% in FY 2022.
Ord Minnett appears confident in its outlook and has put a buy rating and $5.06 price target on its shares.