Analysts name 3 small cap ASX shares to buy

Are these small caps heading higher?

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Looking for some small cap shares to buy? Then have a look at the ones listed below.

Here’s why they could be worth getting better acquainted with:

Adore Beauty Group Limited (ASX: ABY)

The first small cap for investors to look at is Adore Beauty. It is a leading online retailer in the Australian beauty and personal care (BPC) market. It currently has almost 1 million active customers and generated revenue of $113.1 million from them during the first half of FY 2022, which was up 18% year on year. And while this is a large number, even if you annualise it, it is still only a 2% share of the $11.2 billion Australian BPC market. This gives Adore Beauty a significant runway for growth over the next decade.

UBS is a fan of the company and currently has a buy rating and $4.70 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another small cap share that could be in the buy zone is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies. At the last count, there were over 30,000 tradies using the platform, underpinning strong revenue growth.

Analysts at Goldman Sachs are confident that this strong growth will continue over the long term as it grows into its huge market. The broker has a buy rating and $3.60 price target on its shares.

Nitro Software Ltd (ASX: NTO)

A final small cap ASX share for investors to look at is fast-growing document productivity software company, Nitro. It is the company behind the increasingly popular Nitro Productivity Suite. It provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution. And while Nitro has been growing rapidly in recent years, it is still only scratching at the surface of a total addressable market estimated to be $28 billion per year.

The team at Goldman Sachs is also very bullish on Nitro. The broker currently has a buy rating and $4.50 price target on its shares.

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 and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Adore Beauty Group Limited and Nitro Software Limited. 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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