2 small cap ASX shares with a lot of potential

Here are a couple of exciting small cap shares…

If you're wanting to invest in the small side of the Australian share market, then the two small caps listed below could be worth a closer look.

Here's why these small caps are rated highly by analysts:

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Infomedia Limited (ASX: IFM)

The first small cap share to look at is Infomedia. It is a leading global provider of software as a service solutions to the parts and service sector of the automotive industry.

After a solid result in difficult trading conditions in FY 2021, Infomedia's growth is expected to go up a level this year.

Management has provided revenue guidance of $117 million to $123 million. The mid-point of this guidance range implies revenue growth of 23% year on year.

The team at Bell Potter are very positive on Infomedia. In fact, the company is one of its top picks in the tech sector right now. It has a buy rating and $2.00 price target on its shares.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap ASX share to look at is Volpara Health Technologies. It is a healthcare technology company with a focus on the early detection of breast cancer.

It achieves this by improving the quality of screening using artificial intelligence. Volpara's technology, which was developed at Oxford University, has been designed to provide objective data on breast tissue density, which is a key risk marker for breast cancer.

It has been growing at a strong rate in recent years and appears well-placed to continue this trend in the future. This is thanks to the quality of its technology, recent acquisitions, and favourable industry trends.

The team at Morgans are very positive on Volpara. Last week the broker retained its add rating and $1.87 price target on the company's shares. It believes the company's revenue guidance of NZ$25 million in FY 2022 is conservative.

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 Infomedia and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Infomedia. 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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