If you're interested in investing at the small side of the market, then you may want to look at the shares below.
These small cap ASX shares have been rated as buys and tipped to have major upside potential. Here's what you need to know about them:
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Adore Beauty Group Limited (ASX: ABY)
The first small cap to look at is Adore Beauty. It is Australia's leading online beauty retailer. Despite its leadership position and almost 1 million customers, it is still only commanding a modest share of the $11 billion+ Australian beauty and personal care (BPC) market. This gives it a long growth runway as more and more sales shift online.
Morgan Stanley is a fan of the company. It has an overweight rating and $1.90 price target on its shares. This compares favourably to the current Adore Beauty share price of $1.11.
Catapult Group International Ltd (ASX: CAT)
Another 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 has been growing its annual contract value (ACV) at a solid rate in recent years and expects this to continue in FY 2023. Management recently provided ACV growth guidance of between 20% to 25% with a low ACV churn level 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 compares to the latest Catapult share price of 99.5 cents.
Hipages Group Holdings Ltd (ASX: HPG)
A final 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. Analysts at Goldman Sachs are very positive on the company due to its belief that the company can capture a significant portion of industry advertising spend in the future. In fact, it has likened Hipages to the early days of Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA).
Goldman Sachs has a buy rating and $2.50 price target on its shares. This is more than double the current Hipages share price of $1.10.
