Brokers name 2 exciting small cap ASX shares to buy with 80%+ upside

Check out these highly rated small cap ASX shares…

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While the pain at the small side of the market may not be over just yet, when it is, there are likely to be some major bargains for investors.

For example, two small cap ASX shares that have been rated as buys with major upside potential are listed below. Here's what you need to know about them:

Catapult Group International Ltd (ASX: CAT)

The first small cap to look at is Catapult. It is a global sports technology company that provides elite sporting organisations with real time data and analytics to monitor and measure athletes.

It was a strong performer in FY 2022. Catapult's recently released full-year results revealed a 54% increase in revenue to US$77 million and a 19.7% lift in annual contract value (ACV) to US$63.9 million. The latter was supported by a ridiculously low ACV churn rate of 3.4%.

Pleasingly, more of the same is expected in FY 2023. Management is guiding to ACV growth of between 20% to 25% with ACV churn in the range of 4.5% to 6%.

The team at Jefferies currently has a buy rating and $2.00 price target on the company's shares. This is more than double the current Catapult share price.

Nitro Software Ltd (ASX: NTO)

Another small cap ASX share that is rated as a buy is Nitro. It is a technology company that develops document and workflow productivity software for SME and enterprise customers. Nitro's products include PDF editing, simple e-signature solutions, and enterprise grade e-signature and digital ID solutions.

It has been growing its annual recurring revenue (ARR) at a strong rate in recent years and is expected to continue this trend in FY 2022. Management recently noted that its strong first quarter performance puts it on track to achieve its FY 2022 ARR guidance of $64 million to $68 million. This represents a 39% to 47% increase on FY 2021's ARR.

Goldman Sachs is very positive on the company and believes it has a huge market opportunity to grow into. The broker currently has a buy rating and $2.35 price target on the company's shares. Based on the current Nitro share price of $1.27, this suggests 85% upside for investors.

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. has positions in and has recommended Catapult Group International Ltd. The Motley Fool Australia has positions in and has recommended Catapult Group International Ltd. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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