If you are wanting to bolster your portfolio with some ASX tech shares and have a high tolerance for risk, then the small caps listed below could be worth a look.
Both of these small cap tech shares have been tipped as buys by Goldman Sachs recently. Here's what the broker is saying about them:
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Readytech Holdings Ltd (ASX: RDY)
The first small cap ASX tech share that Goldman Sachs has named as a buy is Readytech.
It is a leading provider of mission-critical software-as-a-service (SaaS) solutions for the education, employment services, workforce management, government and justice sectors.
Goldman believes that the company's shares are trading at an attractive level after pulling back following the collapse of a takeover approach. It said:
RDY remains a tech value play within our coverage universe, trading at a >50% discount to peers when accounting for its robust growth outlook. Government software has been a pocket of strength and resilience within TMT (~3/4 of RDY's earnings) and we are positive on RDY's ability to deliver mid-teens organic growth at an expanding profit margin through the cycle.
Goldman Sachs has a buy rating and $4.45 price target on its shares.
Temple & Webster Group Ltd (ASX: TPW)
Another small cap that Goldman Sachs is a big fan of is online furniture and homewares retailer Temple & Webster.
Its analysts believe that Temple & Webster is well-positioned for strong long term growth thanks to its leadership position in a retail category that is in the early stages of shifting online. It commented:
Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.
Goldman has a buy rating and $7.60 price target on its shares.
