Hipages Group Holdings Ltd (ASX: HPG)

The share price of trade sales lead generator, Hipages, has dropped almost 20% over the last year to $0.84 at market close on Tuesday. Its primary service is connecting customers to tradespeople, a business that can be sensitive to interest rate hikes and weakened consumer spending. This might be driving some of the subdued investor sentiment. Also, it does not have a strong defensive moat with some investors concerned that it may be swamped by AI or generalist marketplaces.

But this is a business with strong underlying fundamentals. Even though revenue growth slowed in the first half of 2026, it has expanded its EBITDA margin, showing good operating leverage and discipline. A strong balance sheet with significant cash holdings further de-risks the investment.

Despite potential consumer spending concerns, Australians spent some $53.8 billion on renovations in FY25, the highest spend since 2022, suggesting the market for trades remains strong. Ongoing trade shortages may also fuel consumer demand for some time to come. The key for Hipages will be ensuring that it can continue to attract quality tradespeople in this climate. 

For me, at current prices, Hipages is a real contender. It's a quality business with a good balance sheet in a market where demand continues to grow.

OFX Group Ltd (ASX: OFX)

Australian international payments provider, OFX, has seen share price falls of more than 50% over the last year, closing at $0.58 on Tuesday. Investors had high expectations of this business a few years ago and although its results have been relatively solid, it seems investors have been wanting more. Weakening sentiment across the broader tech sector may also be driving the drop.

OFX is a profitable business with low debt and a global customer network, spanning APAC, North America, Europe and the Middle East. In its last full year results, it reported a 5.5% decline in net operating income and its growth has slowed of late, but its scalable business model remains attractive.

In early February 2026, it announced a strategic review, which could include a potential sale, with management reiterating it believes the business to be undervalued at the current share price.

And I tend to agree. Despite some decline in recent results, OFX has been performing in the longer term and has several potential avenues for growth. It's clearly at a crossroads and the outcome of the strategic review will be interesting, but I think now is the time to move for investors seeking a bargain.

Adore Beauty Group Ltd (ASX: ABY)

Specialty beauty e-commerce and retailer, Adore Beauty has had a tough ride on the share market, dropping some 50% in the last 12 months to $0.42 at market close on Tuesday. However, it continues to deliver positive, if small, revenue growth. That said, net profit has declined sharply (69.9%), which is likely why investor sentiment continues to weaken.

However, at current prices, I think it's worth considering because its revenue is rising, its brand equity is intact, and there are some positive indicators amongst the challenges:

• It has an established brand that has shown it can ride out challenging market conditions
• It's underlying EBITDA for HY26 was up 14.5% on the prior corresponding period, meaning it can generate operating leverage
• Customer growth remains solid
• It appears to be demonstrating disciplined inventory management, critical in such a fast-moving category

It's also worth noting that its profitability decline is likely largely driven by the step up in its omni-channel rollout, with the group opening 10 new stores since July.

This one might be a little more speculative and it's certainly a turnaround play — it will need to recover its margins. But if you are looking for something with hidden potential at the bargain end of the market, Adore Beauty is one to consider.

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Firstly, let's have a look at the results.

Profits solidly higher

Hipages, which runs an online marketplace where users can advertise trade jobs and tradies can bid on them, increased its first-half revenue by 11% to $44.9 million.

The company's EBITDA came in at $11.2 million, up 29% on the previous corresponding period, while net profit increased from $100,000 to $2.7 million.

Hipages Chief Executive Roby Sharon-Zipser said it was a solid result.

The first half of FY26 was a period of focused execution by the hipages team, as we navigated a volatile macroeconomic environment to deliver double-digit revenue growth … EBITDA margin expansion and a significant step-up in free cash flow generation to $4.3 million. We continued to execute our platform strategy, completing the migration of 100% of our tradie customer base to new pricing plans, which helped to drive double-digit ARPU (average revenue per user) growth. We also rebranded our tradie app as 'hipages for business' to target a wider universe of potential customers and expanded 'hipages Perks' to offer exclusive deals and benefits to both tradies and households. Both are showing encouraging early signs.

But what really piqued the interest of the Shaw team was what Mr Sharon-Zipser said around artificial intelligence.

As he said:

Up next in H2, we will further deploy AI workflows into our product to enhance the user experience on both sides of the marketplace, including an AI job posting assistant and tradie location tracker for households, and a voice plugin for even faster quoting, and workday route optimisation for tradies. These are only a few examples, with many further developments coming to drive user engagement and retention.

The company said it expected full-year revenues to come in at $90 to $91 million, generating free cash flow of $8 to $10 million and an EBITDA margin of 24% to 26%.

Hipages shares looking cheap

The Shaw team said the revenue guidance was a decline, which was unfortunate, "but the reasons were specific and don't change long term targets and haven't impacted operating leverage of free cash flow".

And they were particularly enamoured of the company's approach to AI.

As they said:

Hipages management provided a clear and confident message around AI, the opportunity it sees and the benefits it is already realising. At now 11x FY27 Cash EBITDA this category leader is too cheap.

Shaw and Partners has a $2.50 target price on Hipages shares, compared with 81 cents currently.

Hipages was valued at $110.9 million at Wednesday's close.

The post More than 100% upside predicted for this online marketplace which is using AI to its advantage appeared first on The Motley Fool Australia.

The chair of the company, Inese Kingsmill, told shareholders at the company's annual general meeting (AGM) that FY25 had been a transformational year for the company, "as we continued our evolution from marketplace to SaaS-enabled platform, while maintaining our strong and profitable growth trajectory''.  

The company last financial year grew revenue by 10% to $83.1 million, while net profit after tax came in at $2.4 million, a 33% decline from the previous year.

Hipages operates a digital marketplace where users can source and book jobs with tradespeople, who can also use the platform to manage their job acquisition and billing.

Strong balance sheet

Ms Kingsmill said in her address to the AGM that the company's strong financial position gave it plenty of options, including possible merger and acquisition activity.

She told the meeting:

Our robust balance sheet was further strengthened this year by our strong free cash generation, with a closing cash balance of $26.9 million and no debt. This provides the group with a strong foundation to continue investing in our strategic evolution, including selectively exploring inorganic opportunities to accelerate our growth and deliver additional capability.

Ms Kingsmill said the company didn't declare a dividend in FY25. Instead, she said the board determined the best use of funds was to invest for growth.

On this front, the company was, "embedding generative, predictive, and agentic AI applications across our product and operations, positioning Hipages to deliver greater value to both homeowners and tradies''.

For homeowners, this means simpler discovery and smarter ways to plan, connect, and manage projects. For tradies, it means AI-driven tools that support quoting, scheduling, customer management and business optimisation.   

Chief executive Roby Sharon-Zipser told the AGM the company was targeting revenue growth of another 10%-12% this financial year, and free cash flow of $8 million to $10 million.

Shares looking cheap

E&P Capital analysts said on Thursday the reaffirmation of guidance was welcome, "as is the reiteration of the long-term target of achieving 30% cash EBIT margin (from 7% in FY25)".

E&P Capital has a bullish price target on Hipages shares of $2.14, compared with the share price on Thursday of $1.36.

Should this be achieved, it would represent a shareholder return of  57.4%.

Hipages was valued at $184.8 million at the close of trade on Wednesday.

The post More than 50% upside predicted for this digital company which is primed for acquisitions appeared first on The Motley Fool Australia.

The resurgent stock in question is online tradie marketplace operator Hipages Group Holdings Ltd (ASX: HPG).

On 4 June, Hipages shares ended the day at a one-year closing low of 80 cents. At market close on Tuesday, those same shares were swapping hands for $1.365 apiece. That puts the Hipages share price up an impressive 71% in a little over three months.

It's also seen the ASX All Ords tech stock recoup the heavy losses suffered in the first half of calendar year 2025. Shares are now up 8.0% year to date.

Now, here's why Lucas Goode, a portfolio manager at Investors Mutual, expects more outperformance from Hipages shares in the months ahead (courtesy of The Australian Financial Review).

ASX All Ords tech stock tipped to outperform

Asked which stock his fund holds that he believes has the most near-term upside, Goode pointed to Hipages.

"Hipages Group is Australia's largest platform for trade services, connecting homeowners and trades people in a more efficient manner," he said.

"Strong network effects are driving more consumers to post jobs on Hipages because that's where the tradies' are, while tradies subscribe to find the jobs," he added.

Goode likened the potential of the ASX All Ords tech stock with industry giants like CAR Group Limited (ASX: CAR), Seek Ltd (ASX: SEK), and REA Group Ltd (ASX: REA).

He said:

As we have seen with Carsales, Seek and REA Group, online marketplaces are typically a winner-takes-all proposition, and Hipages is well on its way to being the dominant platform for the trades sector.

Goode added:

The founder-led company has now passed the critical inflection point of generating sustainable cash flow while still growing its top line at double digits, notably guiding to 50% growth in free cash flow in the current financial year.

As seen with recent success stories like Catapult Group International Ltd (ASX: CAT) and Life360 Inc (ASX: 360), reaching cash flow breakeven is often a watershed moment for small-cap tech stocks.

Indeed, in FY 2025, the ASX All Ords tech stock reported a 162% year-on-year increase in free cash flow to $5.6 million.

Looking to the company's FY 2026 guidance, Goode concluded, "Hipages' guidance for the 2026 financial year implies a roughly 15 times price-to-free-cash-flow multiple, very reasonable for such a fast-growing and dominant business."

The post Up 71% since June, why this ASX All Ords tech stock could keep charging higher appeared first on The Motley Fool Australia.

After listing on the ASX in late 2020, the online 'tradie marketplace' didn't take long to reward its investors. 

Less than a year after making its ASX debut, the Hipages share price was up more than 60%.

The ASX tech company rode a wave of enthusiasm as investors scrambled to throw money at tech companies in the early stages of the COVID pandemic.

Then things changed and the Hipages share price started to plunge.

In September 2021, Hipages shares were changing hands for $4.10 each.

Nine months later, the Hipages share price had sunk to $0.88, shedding more than 75% of its value over that timeframe.

What happened?

Hipages CEO Roby Sharon-Zipser attributes the rapid decline in his company's fortunes to COVID-era macroeconomic factors such as greater movement restrictions placed on tradies as the pandemic played out.

But he said Hipages' misfortune motivated him to restructure the company in such a way that it would no longer be so affected by macroeconomic conditions.

And the strategic shifts appears to be paying off.

In 2023 Hipages became a profitable company for the first time in 20 years.

More recently, Hipages has been enjoying a resurgence of investor enthusiasm.

In June this year, the company's share price sunk below $0.80.

Today, Hipages shares are trading at around $1.35 each, up 40% in the past month, and almost 70% in the past few months.

Sharon-Zipser said FY25 was a pivotal year of strategic delivery for Hipages.

The company stated it successfully migrated its customer base onto a new single tradie platform, Tradiecore.

Sharon-Zipser said Hipages also introduced new pricing plans in Australia and subscription model implementation in New Zealand.

I'm incredibly proud of the efforts of the team to deliver these key strategic milestones while continuing our strong growth trajectory.
 
To have achieved our guidance for revenue growth, EBITDA margin and free cash flow, while undertaking the most complex technology implementation in our history, is a huge
achievement.

Hipages stated it achieved its FY25 guidance of 10% revenue growth, with total revenue coming in at $83.1 million for FY25.

The company also reported a net profit after tax of $2.4 million and increased its free cash flow to $5.6 million, up 164% on the previous year.

Investors responded positively to Hipages' results announcement on Friday.

The company's share price continues to lift following the upbeat presentation, with Hipages shares up around 5% on Monday.

Where to from here?

Sharon-Zipser said Hipages will continue to capitalise on its recent success.

Looking ahead, our focus is on building new Tradiecore functionality and adding new services that we expect will drive further engagement and profitable growth.

FY26 is set to be a year of momentum and innovation as we aim to activate engagement of
tradies on the platform and unlock the next phase of growth across our marketplaces in
Australia and New Zealand.

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The stock finished the session at $1.11 apiece on Monday, more than 22% off its 52-week high of $1.43 in August.

But for savvy investors eyeing opportunities in ASX small-cap stocks, Hipages may offer an intriguing turnaround story if a handful of experts are correct in their bullish view. Let's take a look.

ASX small-cap stock ready to rebound

Hipages is a 'tradie marketplace' that lets individuals and businesses link up with various tradespersons here in Australia.

Say you need a tradie in your local area to fix the tap, or repair a dent in the wall. You might jump onto Hipages and see what local services there are.

After a strong run in the 2021 to 2022 period, shares hit an all-time high of $4.10 apiece.

But the ASX small-cap stock was heavily sold when high inflation and interest rates sowed their way into markets, resulting in sharp losses for investors.

Despite this, Matthew Brooker from Spheria Asset Management sees Hipages as a standout in the sector.

Brooker says the firm has changed from a pay-per-lead business model to a subscription service, which means growth is more visible. Speaking to The Australian Financial Review:

Hipages continues to win market share and is now the leading tradie marketplace in Australia and New Zealand.

We're confident profitability and free cash flow generation will continue to expand from here..[it is] a bargain for a growing technology business with a subscription model.

And Brooker would be largely correct in his views on the ASX small-cap stock's financials.

Revenues were up 13% to $75 million in FY24, with recurring revenue rising 15% to $72 million. Annual revenue per user (ARPU) also rose 11%.

It also facilitated a record-breaking 2.7 million tradie-homeowner connections, with 86% of jobs matched to at least one tradie.

Growth outlook for FY25

The ASX small-cap stock is targeting FY25 revenue growth in the "low teens", consistent with FY24.

It also expects pre-tax margins to expand by 1 to 2 percentage points. Free cash flow is forecast to hit $4 to $6 million.

At its AGM last month, CEO Roby Sharon-Zipser said the company was better positioned under its subscription model, along with efforts in its Tradiecore initiative.

He said that job volumes had started to return to growth, with Tradiecore delivering "another record quarter".

Our subscription model gives us great visibility over future revenues and our operating model is highly efficient and scalable, which will continue to deliver enhanced operating leverage and margin expansion over time.

Meanwhile, the consensus of broker estimates rates Hipages a buy, according to CommSec.

Foolish takeout

This ASX small-cap stock is catching the eye of brokers and fundies alike with its recent performance and growth outlook.

Whether or not they are correct, time will tell.

In the last 12 months, the Hipages share price is up 59%.

The post Down 72% form its highs, why this ASX small-cap stock is now 'a bargain' appeared first on The Motley Fool Australia.

Shares in the online tradie marketplace operator closed yesterday at $1.28. In earlier trade on Thursday, they leapt to $1.62 apiece, up 26.8%.

After some likely profit-taking, shares are swapping hands for $1.52 apiece at the time of writing, up 18.4%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.3% at this same time.

This strong outperformance comes following the release of Hipages' financial results for the 12 months ended 30 June (FY 2024).

Read on for the highlights.

ASX small-cap stock soars on return to profit

• Total revenue of $75.8 million, up 13% from FY 2023
• Recurring revenue of $72.1 million, up 15% year on year
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $16.4 million, up 33% from FY 2023
• Statutory net profit after tax (NPAT) of $3.6 million, up from a net loss after tax of $5.1 million last year

What else happened with Hipages in FY 2024?

Atop the return to profit from a steep loss last year, the ASX small-cap stock looks to be grabbing investor interest after reporting record marketplace activity in FY 2024, with tradies competing for fewer jobs driving the 15% increase in recurring revenue.

Hipages said that its proactive marketplace management helped it achieve a 13% increase in monthly recurring revenue (MRR) and an 11% year-on-year increase in average annual revenue per unit (ARPU).

EBITDA margins also improved by 4% from FY 2023, coming in at 22% this year.

While operating expenses were up 9% from last year to $59.4 million, Hipages noted that operating expenses improved to 78% of revenue over the 12 months.

Operating cash flow was also up 23% to $19.3 million. This saw positive free cash flow at $2.1 million, following a $2.8 million cash outflow in FY 2023.

Over the year, connections increased 3% to 2.7 million, with the ASX small-cap stock noting a record 86% of all jobs connected with a tradie.

The year also saw Hipages roll out a range of new platform features and functionalities.

As at 30 June, the company had cash and funds on deposit of $21.3 million, with no debt

What did management say?

Commenting on the results sending the ASX small-cap stock soaring today, Hipages CEO Roby Sharon-Zipser said:

The value proposition of the Hipages online marketplace continues to build in the current uncertain economic environment. Tradie subscriptions are growing as tradies seek high quality leads and homeowners are benefiting from strong job connection rates, which now stand at a record 86%…

Our strong operating cash flow enabled us to continue investing substantially in optimising our business and building out the platform for the future.

During the second half we successfully launched our tradiecore single tradie platform and have a range of exciting upgrades and initiatives planned for FY 2025.

What's next for the ASX small-cap stock?

Looking at what might impact the ASX small-cap stock in the year ahead, Hipages said it was targeting "continued strong revenue growth" and further margin expansion, delivering positive free cash flow of $4 million to $6 million.

Sharon-Zipser said the upgrades planned for the company's platform features and functionality in FY 2025 were expected to "further increase our market penetration and better reflect the value of our services to tradies and homeowners".

The company's single tradie platform (STP) will continue to be rolled out to new customers over the coming months.

Hipages share price snapshot

With today's big lift in the Hipages share price factored in, the ASX small-cap stock is up 89% year to date.

The post This ASX small-cap stock just rocketed 27% on its FY 2024 results. Here's why appeared first on The Motley Fool Australia.

Here's what is getting investors excited today:

Hipages Group Holdings Ltd (ASX: HPG)

The Hipages share price is up 11% to $1.02. This morning, this online tradie marketplace operator reported a 15% increase in both revenue and recurring revenue to $37.4 million and $35.2 million, respectively, and a 45% jump in EBITDA to $8.4 million.

This was driven by increases in connection volumes, subscription tradies, and average revenue per user.

Hipages CEO and co-founder Roby Sharon-Zipser said:

Our marketplace has benefitted from ongoing momentum arising from the current uncertain macroeconomic environment, where we have seen a clear increase in demand from tradies using the hipages platform to connect to jobs posted by consumers.

Consumers are benefiting from increased engagement and competition for those jobs.

MMA Offshore Ltd (ASX: MRM)

The MMA Offshore share price is up over 6% to $2.10. Investors have been buying the marine service provider's shares after it reported a 28% lift in revenue to $204.3 million and a massive 339% jump in underlying net profit after tax to $39.5 million.

MMA Offshore managing director David Ross commented:

Market conditions continue to be positive with strong demand for our vessels and services and ongoing rate improvements driving a 97% increase in EBITDA as compared to the first half of FY2023.

The medium-term outlook for offshore activity remains strong with over US$500 billion in greenfield oil and gas projects forecast to be sanctioned globally over the next five years including over US$180 billion in our key operating regions.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 7% to 81 cents after investors responded positively to the telecommunications company's half-year results. Superloop posted a 32.7% increase in revenue to $197.6 million and a profit after tax (before amortisation) of $1.2 million. The latter compares favourably to a loss of $8.3 million a year earlier.

Superloop CEO and managing director Paul Tyler said

We are very pleased to report another period of strong financial performance, delivering record organic revenue and net new customer growth over the period. Importantly, all three segments contributed to this growth.

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The Australian Competition and Consumer Commission announced Tuesday that tradespeople classifieds operator Hipages Group Holdings Ltd (ASX: HPG) confessed to "subscription traps".

The problems originated from the platform not adequately disclosing contract terms when signing up customers.

This effectively meant that tradies, who pay subscriptions as high as $999 each month, had their contracts automatically renewed without their knowledge.

Cancelling contracts also triggered an early termination fee that many customers were not expecting.

"Many subscribers were unaware that they had to specifically opt out of hipages' automatic 12-month renewal, and that there was only a very short cooling off period in which they could avoid paying an early termination fee," said ACCC deputy chair Mick Keogh.

"When some people attempted to cancel their auto-renewed contracts, they were told they would have to pay out the full 12-month term."

Hipages also admitted that it likely breached Australian Consumer Law when telling some customers that they needed to take extra steps to cancel their subscription, and that the platform could enforce payment for an extension of the contract.

"This was not the case because the subscribers had already given valid notice of cancellation before the automatic renewal date."

Online marketplaces notorious for trapping customers

At the time of writing, Hipages had not made an announcement on the ASX in response to these revelations.

According to the ACCC, the tech company agreed to a court-enforceable undertaking that these "subscription trap" mechanisms would be fully disclosed to customers.

Hipages also agreed to reform its complaints handling process.

"The rise of online marketplaces has brought greater convenience to many people, but it's also led to an increase in sneaky tactics such as subscriptions that are difficult to get out of," said Keogh.

"Businesses, including online platforms, must be clear and upfront with their customers about important contract terms such as renewals and cancellations. Failure to do so risks breaching the Australian Consumer Law and may result in enforcement action."

The consumer watchdog noted that Hipages had cooperated with its investigations.

Despite the confession, Hipages shares were up 0.7% in early trade on Tuesday morning.

The post Bombshell confession: ASX tech company admits it 'likely' trapped customers illegally appeared first on The Motley Fool Australia.

These small cap ASX shares have been rated as buys and tipped to have major upside potential in 2023. Here's what you need to know about them:

Catapult Group International Ltd (ASX: CAT)

The first small cap ASX share to look at is Catapult. It is a global sports technology company that provides elite sporting organisations with real time data and analytics to monitor and measure athletes. It has been growing its annualised contract value (ACV) at a solid rate in recent years. Pleasingly, this has continued in FY 2023 despite the tough economic environment. In November, it reported a 21% increase in ACV on a constant currency basis to US$70 million during the first half. Another positive was its record-level retention, with ACV churn at just 4%. Looking ahead, management expects its full year ACV growth to be at least 20% with ACV churn in the range of 4.5% to 6%.

The team at Canaccord Genuity appears to have been pleased with its performance. The broker currently has a buy rating and $1.50 price target on the company's shares. This compares to the latest Catapult share price of 72 cents.

Hipages Group Holdings Ltd (ASX: HPG)

A final ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals. While the tough economic environment has stifled its growth in FY 2023, it is still growing a solid rate. First quarter revenue was up 8% over the prior corresponding period to $16.1 million. This was driven by an increase in average revenue per user, job volumes, and subscriptions.

Analysts at Goldman Sachs are very positive on the company due to their belief that the company can capture a significant portion of industry advertising spend in the future. In fact, the broker has likened Hipages to the early days of Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA).

Goldman currently has a buy rating and $2.10 price target on its shares. This is more than double the current Hipages share price of 97.5 cents.

The post These exciting small cap ASX shares could double in 2023: analysts appeared first on The Motley Fool Australia.

The silver lining on this occasion is the attractive prices that some shares have been left trading at.

Two beaten down ASX shares that could be in the buy zone now are listed below. Here's what analysts are saying:

Hipages Group Holdings Ltd (ASX: HPG)

The first beaten down ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider.

Hipages has been growing at a solid rate in recent years thanks to the increasing popularity of its platform which connects consumers with trusted tradies to simplify home improvement.

Despite this solid growth and its massive market opportunity, the Hipages share price is down a sizeable 66% since the start of the year.

Analysts at Goldman Sachs appears to see this as a buying opportunity for investors. Particularly given their belief that Hipages has a huge growth runway ahead as its ecosystem builds. In fact, the broker has likened the company to REA Group Limited (ASX: REA) in its early years. There is no higher praise.

Goldman currently has a buy rating and $2.20 price target on its shares.

WiseTech Global Ltd (ASX: WTC)

Another beaten down ASX share to consider is this logistics solutions company.

WiseTech is the company behind the popular CargoWise One solution, which allows users to execute complex logistics transactions and manage freight operations from a single, easy to use platform.

Demand has been growing very strongly over the last decade, underpinning incredible sales and profit growth. And despite its outlook looking very positive thanks to its high quality platform, strong market position, and growing freight volumes globally, its shares are still down 16% since hitting a record high earlier this month.

The team at Morgan Stanley are likely to see this as a buying opportunity. The broker currently has an overweight rating and $62.00 price target on its shares.

The post Analysts say these beaten down ASX shares are buys appeared first on The Motley Fool Australia.

However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio due to the potential returns on offer.

After all, if you can find a future mid or large cap whilst it is still a small cap, the returns could be incredible.

With that in mind, listed below are two small cap ASX shares that have been tipped as buys. They are as follows:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform and software as a service (SaaS) provider that connects consumers with trusted tradies.

The Hipages platform helps tradies grow their business by providing job leads from homeowners and organisations looking for qualified professionals.

Goldman Sachs is a very big fan of Hipages and believes "HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia."

The broker currently has a buy rating and $2.20 price target on its shares.

Silk Laser Australia Limited (ASX: SLA)

Another small cap ASX share that has been tipped as a buy is Silk Laser.

It is one of Australia's largest specialist clinic networks. Silk offers a range of nonsurgical aesthetic products and services including laser hair removal, cosmetic injectables, skin treatments, body contouring, and skincare products.

Demand for Silk's services has been strong in recent years and continued in FY 2022. This and recent acquisitions helped the company deliver a 91% increase in sales to $162.7 million.

Pleasingly, management remains positive on the future and "expects to continue its growth trajectory in FY23."

This went down well with the team at Wilsons. In response to its results, the broker has put an overweight rating and $3.62 price target on the company's shares.

The post 2 growing small cap ASX shares analysts rate as buys appeared first on The Motley Fool Australia.

Here's why analysts at Goldman Sachs recently named these ASX mid cap shares as buys:

Adairs Ltd (ASX: ADH)

This homewares retailer is a mid cap ASX share to buy according to Goldman Sachs. Its analysts are very positive on the company due to its loyal customer base and store expansion opportunity. The broker currently has a buy rating and $3.05 price target on its shares. It commented:

The core Adairs business has a highly loyal customer base, and ongoing store roll-out opportunity: ADH is has a strong brand presence across Australia, a highly engaged and loyal customer base (>1mn Linen Lover members), and ongoing opportunity to roll out new and upsized stores. […] Attractive valuation and high dividend yield: we view valuation as undemanding with ADH trading on 6.9x FY23E P/E

Hipages Group Holdings Ltd (ASX: HPG)

Another mid cap ASX share that Goldman Sachs rates highly is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider. The Hipages platform connects tradies with residential and commercial consumers, and also allows them to communicate and run general admin duties. Goldman sees it as a great long term option for investors. It currently has a buy rating and $2.20 price target on its shares. It commented:

Longer term, we believe HPG presents a compelling long growth opportunity as it builds out an essential ecosystem of services for tradies

Temple & Webster Group Ltd (ASX: TPW)

This online furniture retailer is another mid cap share to buy according to the broker. Goldman likes the company due to its leadership position in a market that is in the process of shifting online. The broker recently initiated coverage on the company's shares with a buy rating and $7.55 price target. It said:

We believe the business has a material runway for long-term growth, supported by a large and growing TAM driven by increasing e-commerce penetration which still lags other comparable markets (Aus 16% vs. UK/US 28%/25%), even after a large pull forward in online sales over the last 2-3 years. […] We believe TPW can deliver long term structural growth, despite a slowdown in the near term macro environment.

The post Goldman Sachs names 3 mid cap ASX shares to buy appeared first on The Motley Fool Australia.

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.

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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 ASX shares:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX share that Goldman Sachs has just recommended investors buy is Hipages.

It is a leading ANZ-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies.

Goldman Sachs believes the company has a huge long term growth opportunity. It commented:

Longer term, we believe HPG presents a compelling long growth opportunity as it builds out an essential ecosystem of services for tradies.

In addition, the broker feels the Hipages share price is cheap considering its strong growth potential.

Valuation is supportive relative to global marketplace peers. HPG is trading on 13.9x FY23 EV/EBITDA vs. the median of marketplace peers trading on 15.3x. In our view this does not capture the medium term growth potential of the business: we forecast a 29% EBITDA CAGR (FY22-25E) vs. the median of peers at 14%; we also believe HPG can deliver solid operating leverage over the longer term as the business scales.

Goldman has a buy rating and $2.10 price target on the company's shares. This compares favourably to the current Hipages share price of $1.55.

IDP Education Ltd (ASX: IEL)

Another ASX share that the broker is tipping as a buy is IDP Education. It is a leading language testing and student placement provider.

Goldman was very impressed with the company's FY 2022 results and believes it shows that IDP is becoming the dominant force in English-speaking markets. It said:

We believe IEL's FY22 result reflected 1) operational excellence by managing costs whilst preparing capacity for a strong rebound of students into Australia; and 2) material progress towards becoming the dominant student placement provider into English-speaking markets, including leveraging technology to build a growing presence in the US.

As with Hipages, the broker feels that its shares are cheap considering its strong growth prospects.

IEL is trading c.40% below its 5-yr average P/E premium to the ASX200 Industrials with a forecast 37% FY22-25E EPS CAGR, we remain Buy-rated. We have upgraded EPS in FY23/FY24 by 1.7%/0.8% on the back of the stronger FY22 result, continued strong revenue growth and margin expansion. The balance sheet is in a resilient position with c.A$40mn of net cash to facilitate any bolt-on acquisitions or ramp up in organic investment in new offices and technology.

Goldman has retained its buy rating with an improved price target of $36.00. This compares to the latest IDP Education share price of $28.89.

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Hipages shares were sinking by as much as 9% in early trading but have since partially recovered and are currently down 2.68% at $1.45 apiece.

Let's get the measuring tape out and see what unfolded in FY22 for the ASX-listed tradies services platform.

What did Hipages report for FY22?

• Revenue of $61.9 million, up 11% from $55.8 million in FY21
• Operating expenses of $51.1 million, up 15% from $44.3 million in FY21
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) before significant items of $10.7 million, down 8% from $11.7 million in FY21
• EBITDA margin of 17%, down from 21% in FY21
• Net loss after tax of $0.91 million, compared to a profit of $1.2 million in FY21

Across Hipages' key operations, it recorded higher monthly recurring revenue of 5% to $5.5 million. The number of jobs processed on the Hipages platform also lifted 6% to 1.63 million. The average revenue per user surged 11% to $1,707 compared to $1,536 in FY21.

The jump in operating expenses was due to greater investment in headcount and marketing. Marketing expenditure went up from $16 million to $18.8 million, in particular building its brand through the sponsorship of The Block.

In terms of employees, Hipages invested in its tech team to support growth and strategic execution.

Despite the reversal in Hipages' bottom line, it managed to improve its operating cash flow slightly from $12.5 million in FY21 to $12.7 million in FY22.

Hipages, which only listed in November 2020, appears to be in a sound financial position with cash and funds on deposit of $13.2 million and no debt.

What else occurred in FY22?

Hipages rolled out its job management solution, which plays a crucial role in transitioning to a software-as-a-service model. Tradie subscribers can now use the platform to schedule and personalise documentation with self-service options.

The tradie marketplace business also acquired Builderscrack, a similar business based in New Zealand. This enabled Hipages to achieve its goal of becoming the leading tradie marketplace across the trans-Tasman.

In addition, the company acquired a 25% stake in Bricks & Agent, one of Australia's leading property management technology platforms.

Management commentary

Speaking on the results, Hipages co-founder and CEO Roby Sharon-Zipser said:

In FY22 we faced a perfect storm for a marketplace business, with supply constricted by our tradie customers being unable to work due to COVID restrictions, then facing an unprecedented backlog of jobs driven by strong consumer demand.

In this environment, the strength of our subscription model shone through, enabling us to deliver growth in revenues, subscription tradies and ARPU, while executing our strategy and consolidating our position as the #1 online tradie marketplace in both Australia and New Zealand.

What's ahead for Hipages?

Management expects H1 FY23 revenue growth to stay in line with H2 FY22 and then accelerate to the mid-teens in the second half of FY23.

The EBITDA margin for FY23 is expected to be ahead of FY22.

The company advises there is a clear path towards free cash flow after recording positive free cash flow in its most recent quarter for FY22.

Commenting on the outlook, Sharon-Zipser said:

Looking ahead, I am very excited about the future for hipages Group. The countercyclical nature of our model means that we are well positioned to benefit from economic uncertainty in the near-term, while the opportunity in our existing markets and new adjacencies is significant.

Our efficient operating model gives us the confidence to continue to invest with a clear pathway to ongoing positive free cash flow. We remain highly focused on executing our strategy and investing to build the foundations for long-term profitable growth.

Hipages share price snapshot

The Hipages share price has copped a hammering alongside other ASX growth stocks over the last 12 months, dropping 52%. It has also fallen 62% this year to date. However, it has rallied in the past month, up 28%.

The S&P/ASX 200 Index (ASX: XJO) hasn't been as erratic, falling 6% in the past year and then climbing up 4% in the last month.

Hipages has a market capitalisation of around $195 million.

The post Hipages share price sinks as 'perfect storm' hits profit appeared first on The Motley Fool Australia.

Here's why the broker is bullish on these small cap shares:

Hipages Group Holdings Ltd (ASX: HPG)

The first small cap ASX share to consider is Hipages. It is a growing Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies.

Hipages recently released its fourth quarter update and delivered further solid growth. This went down well with Goldman Sachs, which believes the update points to a rebound in momentum after a tough period. It said:

We view HPG's beat in net new tradies (400 vs GSe of 300) as a positive sign that the momentum in the business is returning; a slowing economy and housing cycle should make the HPG platform incrementally more valuable as a source of work for tradies. We believe difficulties in new tradie additions and elevated churn in previous quarters reflected labour shortages across the industry and are confident a rebalancing in industry supply/demand will see these challenges resolve.

Outside this, the broker has previously suggested that "the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries."

Goldman has a buy rating and $2.55 price target on its shares. Based on the current Hipages share price of $1.40, this implies potential upside of 82% over the next 12 months.

Nitro Software Ltd (ASX: NTO)

Another small cap ASX share that Goldman Sachs is bullish on is Nitro Software. It is a growing software company driving digital transformation in businesses around the world across multiple industries.

It is doing this through its key solution: the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers via a software-as-a-service and desktop-based software solution.

Nitro's shares were hammered last month after the company downgraded its guidance. While Goldman was disappointed with its update, it hasn't changed its view that this is a company with enormous long term growth potential.

Goldman explained:

We see the update as re-basing market expectations on NTO's growth outlook and highlighting the path to breakeven; however, we acknowledge that NTO will likely enter a "show me" phase where consecutive quarters of strong ARR performance are necessary to allay concerns over execution challenges. That said, we continue to see NTO as an undervalued global growth opportunity and highlight that the company now trades at ~12x FY24E EV/EBITDA on a capitalisation-adjusted basis.

The broker has a buy rating and $2.05 price target on its shares. Based on the current Nitro share price of $1.11, this implies potential upside of 85% over the next 12 months.

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The Hipages share price surged 13.6% to finish the session at $1.295. For perspective, the S&P/ASX 200 Communication Services Index (ASX: XTJ) jumped 0.61% today.

So what did Hipages report today?

Hipages share price lifts amid 9% revenue boost

It was onwards and upwards for the Hipages share price today following the release of the company's Q4 FY22 activities report. Highlights included:

• Total revenue leapt 9% on the prior corresponding period (pcp) to $15.8 million
• Average annual revenue per unit (ARPU) surged 10% to $1,806
• Hipages Australia ARPU soared 16% to $1,904
• Subscription tradies leapt 11% on the pcp to 34,600
• $13.2 million cash and funds on deposit, no debt

What else did Hipages report?

Hipages is an online tradie marketplace and software-as-a-service (SaaS) provider that connects homeowners and companies with tradies.

Tradie registrations are rising and job numbers and churn are normalising following the COVID-19 pandemic, according to Hipages.

The company delivered free cash flow of $0.3 million in the fourth quarter, compared to an outflow of $2.5 million in the previous quarter.

Hipages highlighted its efficient business model is underpinning favourable free cash flow and balance sheet strength.

Management commentary

Commenting on the results that boosted the Hipages share price today, CEO and co-founder Roby Sharon-Zipser said:

For Hipages Group to continue to grow in such a challenging environment, while generating positive free cash flow and closely managing our expenses, highlights the power and resilience of our business model.

We will continue to invest in our products and technology and develop new expansionary services to enhance the customer experience and expand our addressable market.

Looking ahead

Hipages is expecting rising inflation and interest rates to bring "balance to marketplace". With this in mind, Hipages predicts tradies will be more reliant on the company's platform to source jobs.

On 25 August, Hipages will release its FY22 full-year results and update the market further on its outlook for FY23.

Hipages share price snapshot

The Hipages share price has dived 59% in the past year and more than 66% year to date.

However, in the past month, the company's share price has lifted almost 28%.

Hipages has a market capitalisation of about $169 million based on the current share price.

The post 'Power and resilience': Hipages share price leaps 14% on revenue boost appeared first on The Motley Fool Australia.

These small cap ASX shares have been rated as buys and tipped to have major upside potential. Here's what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

The first small cap to look at is Adore Beauty. It is Australia's leading online beauty retailer. Despite its leadership position and almost 1 million customers, it is still only commanding a modest share of the $11 billion+ Australian beauty and personal care (BPC) market. This gives it a long growth runway as more and more sales shift online.

Morgan Stanley is a fan of the company. It has an overweight rating and $1.90 price target on its shares. This compares favourably to the current Adore Beauty share price of $1.11.

Catapult Group International Ltd (ASX: CAT)

Another small cap to look at is Catapult. It is a global sports technology company that provides elite sporting organisations with real time data and analytics to monitor and measure athletes. It has been growing its annual contract value (ACV) at a solid rate in recent years and expects this to continue in FY 2023. Management recently provided ACV growth guidance of between 20% to 25% with a low ACV churn level in the range of 4.5% to 6%.

The team at Jefferies currently has a buy rating and $2.00 price target on the company's shares. This compares to the latest Catapult share price of 99.5 cents.

Hipages Group Holdings Ltd (ASX: HPG)

A final ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals. Analysts at Goldman Sachs are very positive on the company due to its belief that the company can capture a significant portion of industry advertising spend in the future. In fact, it has likened Hipages to the early days of Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA).

Goldman Sachs has a buy rating and $2.50 price target on its shares. This is more than double the current Hipages share price of $1.10.

The post Analysts name 3 exciting small cap ASX shares with major upside potential appeared first on The Motley Fool Australia.

For example, the two small cap ASX shares listed below have fallen materially but still have incredibly bright futures. Here's why analysts are rating them as buys:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals.

Goldman Sachs remains very positive on Hipages. This is due to its belief that it can capture a significant portion of industry advertising spend in the future. The broker has likened Hipages to the early days of Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA). And looking at where these two companies are today, this is quite a statement.

The broker commented:

In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. […] HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia.

Goldman Sachs has a buy rating and $2.50 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another small cap that is highly rated is Nitro Software. It is the document productivity software company behind the Nitro Productivity Suite that is driving digital transformation in organisations around the world.

Bell Potter is very positive on Nitro and notes that it continues to win market share due to its cost effective and easy deploy offerings. The broker also sees significant cross sell opportunities ahead.

It said:

The company has been successfully competing against and gaining market share from more entrenched providers in the market by providing a more cost effective and easier to deploy solution for both PDF productivity and electronic signing. […] The company now has a new area of growth, however, with the release of Nitro Sign as a standalone product so most customers will likely have to start paying more for using this product.

Bell Potter has a buy rating and $2.50 price target on its shares.

The post Analysts say these small cap ASX shares have huge potential appeared first on The Motley Fool Australia.