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 small caps are highly rated by analysts right now:
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Bluebet Holdings Ltd (ASX: BBT)
The first small cap ASX share to look at is sports betting company, Bluebet.
It's fair to say that 2022 has not been kind to the Bluebet share price. A selloff of sports betting shares globally has led to its shares losing almost 50% of their value since the turn of the year.
While this is disappointing, the team at Morgans remains positive and appears to see this a buying opportunity for long term focused investors. It currently has an add rating and $1.60 price target on its shares.
It commented: "BBT has materially de-rated (FY22 EV/Revenue of 1.6x) in recent months as online sports betting (OSB) peers have come under significant valuation pressure. We remain confident that BBT will retain a disciplined approach in its dual track growth strategy and think this differentiated model will support a re-rating as a track record is established."
Nitro Software Ltd (ASX: NTO)
Another small cap ASX share to look at is Nitro Software. It is a global document productivity software company behind the Nitro Productivity Suite. Nitro's core solution provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.
As with Bluebet, its shares have fallen heavily in recent months and have lost 45% of their value in 2022.
Goldman Sachs sees this as a buying opportunity. It 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 $2.60 price target on its shares.
