If you have a penchant for investing in small cap shares, then you might want to look at the two listed below.
Here's why these are highly rated by analysts right now:
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MoneyMe Ltd (ASX: MME)
The first small cap ASX share to watch is MoneyMe. It is a fintech that uses technology and artificial intelligence to deliver highly automated credit products and customer experiences.
The company notes that it originates through a diversified mix of credit products and distribution channels to create significant scale and long-term customer advantages. This will soon include the SocietyOne business, which the company is acquiring for $132 million.
Morgans is positive on the company and believes it has strong long term growth potential.
The broker commented: "In our view, MME continues to deliver strong organic book growth and believe its new, innovative product suite, targeting niche under-serviced markets has the potential to further drive top-line growth. Add maintained."
Morgans has an add rating and $2.50 price target on the company's shares.
Nitro Software Ltd (ASX: NTO)
Another small cap ASX share to look at is Nitro Software. It is a global document productivity software company aiming to drive digital transformation in organisations across multiple industries globally.
Nitro's core solution, the Nitro Productivity Suite, provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.
Goldman Sachs is positive on Nitro and believes the market is underestimating its growth potential as a challenger in a US$34 billion total addressable market across PDF, e-signing and workflows.
It commented: "Nitro is down ~50% since November with the market currently pricing in long-term growth and margin assumptions that understate Nitro's potential, in our view. We are positive on Nitro's structural growth opportunity, reflected in our DCF scenario analysis implying an attractive asymmetric risk/reward skew."
Goldman Sachs has a buy rating and $2.95 price target on its shares.
