It is not often you find ASX shares trading for less than a takeaway coffee.
But price alone does not tell you much about value. What matters more, in my view, is whether the business has a large opportunity ahead of it and a clear path to grow into that opportunity over time.
Here are three ASX shares under $5 that I think have the potential to be much bigger businesses in the years ahead.
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DroneShield Ltd (ASX: DRO)
DroneShield operates in a niche that is becoming increasingly important.
Its technology is designed to detect and counter drones, which are now being used across defence, security, and critical infrastructure. That demand backdrop has shifted quickly in recent years, particularly as geopolitical tensions have increased.
What I like most is the scale of the opportunity. Counter-drone technology is still relatively early in its adoption curve, but the use cases are expanding rapidly. Governments, airports, and private operators are all potential customers.
I think the key question is not whether demand exists, but how large it could become.
DroneShield is positioning itself as a specialist provider in this space, and if adoption continues to broaden, the addressable market could grow significantly from here. That does not guarantee success, but it does create the kind of long-term optionality I look for in smaller companies.
Catapult Group International Ltd (ASX: CAT)
Catapult sits at the heart of sport, data, and performance technology.
This ASX share provides analytics and wearable tracking solutions to professional sports teams, helping them optimise performance and reduce injury risk. That might sound niche, but the company is already working with more than 3,000 teams across over 40 sports globally.
What I find interesting is how the growth opportunity is evolving.
According to the company's recent analyst day presentation, the professional team market alone includes more than 20,000 teams, with significant room for further penetration. That gives a sense of the existing total addressable market, before even considering adjacent opportunities.
But it goes further than that. Catapult is increasingly focused on expanding revenue per customer. Its land and expand strategy is built around adding more products and increasing average contract value over time, with a long-term ambition to grow annualised contract value materially.
To me, that combination is important. It is not just about adding more teams. It is about deepening relationships with existing ones, which can be a powerful driver of long-term growth if executed well.
SiteMinder Ltd (ASX: SDR)
SiteMinder is building what it describes as a global platform for hotel commerce.
Its software helps hotels manage bookings, distribution channels, and pricing across a highly fragmented ecosystem. That might not sound exciting at first glance, but the scale of the network is significant.
The platform already connects around 53,000 properties globally and facilitates tens of millions of reservations each year.
What I find compelling is the underlying market opportunity. The ASX share sits at the centre of a global hotel ecosystem, connecting hundreds of systems, apps, and distribution channels. As that ecosystem becomes more complex, particularly with the rise of AI-driven pricing and distribution, the need for a central platform could increase.
There is also a clear monetisation opportunity. SiteMinder has outlined a potential 5x uplift in revenue per customer as more products are adopted across its existing base. That suggests a large internal growth runway, even without relying solely on new customer additions.
Foolish takeaway
Shares trading under $5 can sometimes be overlooked, but they can also offer exposure to businesses with meaningful long-term growth potential.
DroneShield is operating in a market that is still emerging but expanding quickly, Catapult has a clear pathway to grow both its customer base and revenue per customer, and SiteMinder is building a global platform with increasing relevance as the hotel industry becomes more complex.
None of these are guaranteed winners, and all come with risks. But for me, they each have something that matters more than their share price. A large opportunity and a strategy to grow into it over time.
