If you’re wanting to invest in the small side of the Australian share market, then the small caps listed below could be worth a closer look.
Both of these shares have been named as buys and tipped for big things in the future. Here’s why these small cap ASX shares could be worth adding to your watchlist:
Catapult Group International Ltd (ASX: CAT)
The first small cap to look at is Catapult. It is a global sports analytics company that provides elite sporting organisations and athletes with real time data and analytics to monitor and measure athletes.
The company’s technology is used by many of the biggest and most successful sports teams and organisations across the world. And while demand softened at the height of the pandemic, it has rebounded strongly since then.
For example, Catapult reported a 13% increase in revenue to $37.5 million during the first half of FY 2022. This was driven by 29% growth in subscription revenue, which management notes reflects Catapult’s strategic shift to a focus on high quality recurring revenue SaaS deals.
Jefferies is a fan. It currently has a buy rating and $3.00 price target on the company’s shares.
Volpara Health Technologies Ltd (ASX: VHT)
Another small cap to look at is Volpara. It is a growing MedTech software as a service company and the provider of breast imaging analytics and analysis products.
Its products improve clinical decision-making and support the early detection of breast cancer. Demand has been growing strongly in recent years and has continued in FY 2022. During the second quarter, the company reported a 63% increase in subscription based revenue. This took its annualised recurring revenue to US$20.4 million at the end of the period.
The good news for investors is that this is still only a fraction of its US$750 million addressable market in just breast cancer screening. It also has its eyes on other markets such as lung cancer screening.
Morgans currently has an add rating and $1.87 price target on the company’s shares.