The small side of the market has been a difficult place to invest this year. Due to a sudden disdain for loss-making tech shares, the market has punished a number of highly promising small cap shares.
While this is disappointing, it could be an opportunity for patient, long-term focused investors.
Here are two small cap ASX shares that brokers rate as buys and are forecasting huge growth in the future:
Hipages Group Holdings Ltd (ASX: HPG)
The first ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals.
In addition, the company's Tradiecore software helps tradies with job management, understanding profitability, and to create a smoother experience for both them and their customers.
Goldman Sachs is a very big fan of Hipages and believes it has enormous potential. In fact, the broker has likened the company to Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA) in the early days.
The broker commented: "In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. […] HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia."
The broker currently has a buy rating and $2.50 price target on its shares.
Nitro Software Ltd (ASX: NTO)
Another small cap that is highly rated is Nitro Software. It is the document productivity software company behind the Nitro Productivity Suite that is driving digital transformation in organisations around the world.
Bell Potter is very positive on Nitro. It currently has a buy rating and $2.50 price target on its shares.
It said: "[Nitro] Remains a key pick despite not reporting last month but looking value for a high quality, mid cap tech stock on FY22 EV/EBITDA and PE ratios of c.22x and 40x and we also expect a good 1HFY22 result in May with, in particular, strong SaaS ARR growth."
