2 small cap ASX shares to get excited about

Here are a couple of exciting small caps…

| More on:
A man and woman put hands in the air as they dance in front of a green brick wall.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're wanting to gain exposure to the small side of the market, the shares listed below could be worth considering.

Both of these small cap ASX shares have been tipped as buys by analysts. Here's why:

Adore Beauty Group Limited (ASX: ABY)

The first small cap ASX share to look at is Adore Beauty. It is an integrated content, marketing, and ecommerce retail platform with a focus on the beauty market.

At the last count, the company had 874,000 active customers, which was up 24% over the prior corresponding period. From these customers, the company generated revenue of $63.8 million during the first quarter of FY 2022. This represents a 25% increase on the same period last year.

The good news is that even if you annualise its Q1 revenue to $255 million, it is still only a small slice of the $11 billion a year Australian beauty and personal market. This provides Adore Beauty with a long runway for growth over the next decade as more and more industry sales shift online.

Shaw and Partners is a fan of Adore Beauty. Its analysts currently have a buy rating and $6.00 price target on its shares.

Serko Ltd (ASX: SKO)

Another small cap ASX share to look at is Serko. It is an online travel booking and expense management provider.

It recently announced the completion of a NZ$75 million placement to support its growth. This includes supporting Serko's global marketplace strategy, which is aiming to transform the company from an online booking tool into a distributed marketplace.

In addition, some of the proceeds will be used to support its Booking.com for Business offering. Management advised that following the successful migration of Booking.com business customers onto the new Zeno powered Booking.com for Business platform, Serko will undertake targeted investment to optimise customer engagement and extend the offering across global markets to maximise the potential of the opportunity.

All in all, this appears to have left Serko well-placed for growth once travel markets return to normal.

Ord Minnett certainly believes this to be the case. Last week the broker retained its buy rating and lifted its price target to $8.10.

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 Serko Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Serko Ltd. 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

Two kids in superhero capes.
Small Cap Shares

2 small-cap ASX shares I think are great buys right now

These small stocks have big potential, in my opinion.

Read more »

Man with rocket wings which have flames coming out of them.
Small Cap Shares

Guess which small cap ASX stock is rocketing 42% on Mercedes-Benz deal

This small cap is ending the week with a very strong gain.

Read more »

A young man working from home sits at his home office desk holding a cup of tea and looking out the window
Small Cap Shares

These small cap ASX shares could rise 25% to 100%

Analysts are tipping these small cap to rise strongly from current levels.

Read more »

A woman holds a tape measure against a wall painted with the word BIG, indicating a surge in gowth shares
Small Cap Shares

2 ASX shares on track for monster return potential

These ASX shares have a compelling future, in my view.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Small Cap Shares

Which small cap ASX stock is jumping 20% after receiving a takeover offer?

This tech stock could be heading to the NASDAQ after receiving a takeover offer.

Read more »

Blue % sign with white dollar signs.
Small Cap Shares

Buy these small cap ASX shares before interest rates fall

Analysts think these small caps could generate big returns.

Read more »

A woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.
Small Cap Shares

Why I think this ASX penny stock is a bargain at its 52-week low

Things be looking up soon for this underappreciated ASX share, in my view.

Read more »

Three different hands against a blue backdrop signal thumbs up, indicating share price rise on the ASX market
Small Cap Shares

More small cap ASX stocks to buy when interest rates fall

Bell Potter thinks these small caps could rally when interest rates fall.

Read more »