Now could be a good time to buy the small-cap ASX tech share in this article.
That's the view of analysts at Bell Potter, who are tipping big returns from its shares for investors over the next 12 months.
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Which small-cap ASX tech share?
Bell Potter is positive on WRKR Ltd (ASX: WRK). It is a regulation technology company for Australian employers across the employee lifecycle, with a core focus on managing superannuation compliance events.
While the broker has revised its estimates to reflect a slight slowdown, it remains very positive on the future. It said:
While iconic businesses are moving fast, the mid-market is seen to slow things down, extending beyond the July deadline. We revise FY27 revenue and include a cautious scenario, based on the lower end of the guidance range ($30-35m in exit rate ARR). There are a few good moving parts like: 1) $5m in float-based income, 2) $10m of different ARR attached to PaidRight (on track to do $4m), 3) another $5m opportunity tied to the small business clearing house, and 4) $2m from electronic service addresses.
However, we see fewer pathways to an immediate positive surprise, with the commercial terms between WRK and MUFG nearing renegotiation. A second look at AustralianSuper and its grassroots have resulted in changes. Our FY27 revenue is reduced from $36m to $32m from counterparty risk. At worst, we expect a three-month delay. The ATO should have a low tolerance for those showing little attempt to meet their obligations.
Big potential returns
According to the note, Bell Potter has retained its speculative buy rating on the small-cap ASX tech share with a trimmed price target of 15 cents.
Based on its current share price of 9.2 cents, this implies potential upside of 63% for investors with a high tolerance for risk over the next 12 months.
Commenting on its investment thesis, Bell Potter said:
Our Buy (Spec.) rating is unchanged. We risk up ahead of the quarterly update. While we expect strong early metrics from the platform, the outlook now reads less positive on closer look. WRK has mapped out $12m of insurance and detailed the next $10m expansion phase, which could grow into a similar sized standalone. Either this gains pace, Rest and AustralianSuper benefit in isolation, or new MUFG clients are signed.
