If you're looking for new investment options at the small side of town, then the two ASX shares listed below could be worth considering.
Both are highly rated by analysts at Goldman Sachs and tipped to generate strong returns for investors.
Here's what the broker is saying about these small cap ASX shares:
Hipages Group Holdings Ltd (ASX: HPG)
The first small cap ASX share that Goldman Sachs is recommending to investors is Hipages.
It is a leading ANZ-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies.
Goldman Sachs is bullish on the company due to its belief that Hipages has strong medium term and long term growth potential. In respect to the form, Goldman is forecasting a 29% EBITDA compound annual growth rate (CAGR) for FY 2022 to FY 2025.
As for the long term, the broker commented:
Longer term, we believe HPG presents a compelling long growth opportunity as it builds out an essential ecosystem of services for tradies.
Goldman currently has a buy rating and $2.20 price target on the company's shares. Based on the current Hipages share price, this implies potential upside of over 70% for investors.
Nitro Software Ltd (ASX: NTO)
Another small cap ASX share that Goldman Sachs is bullish on is Nitro. It is a document productivity software provider. It is aiming to drive digital transformation in organisations around the world across multiple industries with its core solution, the Nitro Productivity Suite.
Like Hipages, Goldman Sachs is forecasting very strong growth in the coming years and believes the company has a huge long term opportunity. It said:
We continue to see NTO as an undervalued global growth opportunity (>20% FY22-25E ARR CAGR) with high gross margins (~90%), a sound balance sheet (US$35mn net cash) and very little priced into the current valuation.
Even after a recent jump following a rejected takeover approach, Goldman sees plenty of value in the Nitro share price with its buy rating and $2.05 price target. This implies potential upside of 23% for investors from current levels.
