Why Bell Potter says this under-the-radar ASX small-cap stock has 62% upside in 2025

Bell Potter forecasts another strong year ahead for this booming ASX small-cap stock.

Under-the-radar ASX small-cap stock Austin Engineering Ltd (ASX: ANG) has just capped off a very good year for its shareholders.

Austin Engineering shares closed yesterday at 52 cents. In morning trade on Friday, shares in the global, mining-focused engineering company are trading 1.3% higher at 53 cents apiece. That brings the Austin Engineering share price up 71% over 12 months.

For some context, the All Ordinaries Index (ASX: XAO) has gained 12% over this same period.

The engineering company currently has a market cap of $329 million. Shares also trade on a fully franked 2.3% trailing dividend yield.

And according to Bell Potter this small-cap ASX stock is well-placed to keep on charging higher in 2025.

A young boy wearing a hat, sunnies and striped singlet looks fierce and flexes his arm in victory.

Image source: Getty Images

ASX small-cap stock tipped to outperform again in 2025

Bell Potter believes that Austin Engineering is "undervalued" relative to its peers. The ASX small-cap stock trades on a price-to-earnings (P/E) ratio of around 10.5 times.

According to Bell Potter's Marcus Barnard (quoted by The Australian Financial Review), "features such as lower weight, ability to customise to mine requirements and fabrication proximity to client" provide Austin Engineering with its high customer retention rates, a competitive advantage over its peers and "strong" intellectual property.

"There are several companies competing in Australia," Barnard said. He noted that Austin Engineering "could potentially acquire a competitor and achieve synergies".

Bell Potter initiated a buy rating on the ASX small-cap stock with an 86 cent price target. That represents a potential upside of more than 62% from current levels.

What's been happening with Austin Engineering?

Austin Engineering reported its full-year (FY 2024) results on 27 August.

Highlights included a 21% year-on-year increase in revenue to $313.2 million, with revenue improvements reported across all its operating regions.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $46.6 million was up 48.9% from FY 2023. And underlying net profit after tax (NPAT) of $31.0 million increased by 71.3%.

At the end of the financial year, the ASX small-cap stock had net cash holdings of $9.6 million.

Looking ahead, the company is forecasting FY 2025 revenue of approximately $350 million, some 11% higher than in FY 2024.

Commenting on the performance that helped drive the ASX small-cap stock's success over the year, Austin CEO David Singleton said at the time:

The results reflect a doubling down on our Austin 2.0 operational strategy, which has led to increases in revenue, forward order book, and a much stronger cashflow position at the end of the year.

Our improved financial performance has been driven by a series of initiatives designed to enhance operating efficiencies and lower costs across our business units, which has led to a continued growth in margins.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Austin Engineering. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Small Cap Shares

Male hands holding Australian dollar banknotes, symbolising dividends.
Small Cap Shares

This ASX small-cap share is predicted to deliver market-beating returns

The smallest stocks can deliver big returns.

Read more »

three children wearing superhero costumes, complete with masks, pose with hands on hips wearing capes and sneakers on a running track.
Broker Notes

3 ASX small-cap shares to buy amid sector weakness: experts

The ASX Small Ords Index has tumbled 14% in 2026 vs. a 1% fall for the broader ASX All Ords.

Read more »

Small girl giving a fist bump with a piggy bank in front of her.
Small Cap Shares

An ASX small-cap share to buy for its bright future

Investors can get excited about this stock.

Read more »

Man with a surprised expression on his face as he looks at his computer screen.
Small Cap Shares

Could this exciting growth stock be set to triple? Morgans thinks it can

This stock is a must watch.

Read more »

Hand stacking increasing piles of rocks.
Small Cap Shares

Why investors should be targeting ASX mid-caps and ASX small-caps after earnings season: Expert

A new report suggests there is upside for smaller equities.

Read more »

A police officer points their detector at a speeding car.
Small Cap Shares

Why is this ASX small cap up 160% to get an ASX 'speeding ticket'?

Let's take a look.

Read more »

Five young boys wearing small caps sit on a bench together watching a baseball game.
Small Cap Shares

2 ASX small-cap shares to buy and 1 to sell: Experts

The ASX Small Ords Index is down 9% in 2026 versus a 2% bump for the broader ASX All Ords.

Read more »

$50 Australian dollar note on top of a plant pot.
Small Cap Shares

This profitable ASX small-cap just posted record results

This unglamorous operator is building a surprisingly attractive growth engine.

Read more »