Here's what the broker is saying about these tech shares:

Catapult Group International Ltd (ASX: CAT)

This sports technology company's shares could be a buy according to Bell Potter. Particularly given how it is expected to be cash flow positive in FY 2024.

Bell Potter has a buy rating and a $1.20 price target on its shares. This implies a 33% upside for investors from current levels. It comments:

Catapult develops and sells wearable tracking and analytics solutions to sporting teams and athletes globally. Importantly the company has just turned EBITDA positive and said it will be free cash flow positive in FY24 (thus reducing or eliminating the need for an equity raise). We expect continued strong revenue growth in the core Wearables business in FY24 and also expect growth in the previously lagging Video business to significantly improve this year. This suggests or implies a return to double digit revenue growth in FY24 and with a relatively stable fixed cost base, a reasonable portion of the additional revenue is expected to fall through to earnings.

Ikegps Group Ltd (ASX: IKE)

Another small-cap ASX tech share that could be a buy according to Bell Potter is IkeGPS. It is a software solutions company with a focus on the utilities and communications sectors. As with Catapult, the broker believes that the company is heading towards positive cash flow. It also highlights the company's massive opportunity in North America.

Bell Potter currently has a speculative buy rating and a $1.18 price target on its shares. This implies a potential upside of 81% for investors from current levels. The broker explains:

IKE's growth is underpinned by the $410 billion fibre, 5G, and rural broadband rollout in North America, which offers IKE the opportunity to embed its solutions within clients. IKE is planning to release its Next Gen PoleForman product in 2HCY23, which has already displaced a competing product from a 20-year account prior to hard launch, and is currently in the development phase of a pole-specific AI automation project with "one of the world's largest digital data collection businesses for global infrastructure". Although we anticipate a soft June quarter, we currently forecast positive full year EBITDA and operating cash flows for FY24e.

The post Why Bell Potter is tipping 30%+ returns from these small-cap ASX tech shares appeared first on The Motley Fool Australia.

The prospect of rising inflation, however, still looms large. So the market's appetite for ASX cash-eating machines is definitely not what it once was.

So how can investors get on board the growth train whilst minimising their risk exposure? The answer is to do a little homework on the growth stocks you'd like to buy before diving in.

Our Foolish writers have done some homework of their own and these are the ASX growth shares they reckon are well worth a look at in February:

6 best ASX growth shares for February 2023 (smallest to largest)

Vmoto Ltd (ASX: VMT), $103.52 million

IkeGPS Group Ltd (ASX: IKE), $151.75 million

BetaShares Global Cybersecurity ETF (ASX: HACK), $624.96 million

Johns Lyng Group Ltd (ASX: JLG), $1.51 billion

Domino's Pizza Enterprises Ltd (ASX: DMP), $6.44 billion

Aristocrat Leisure Limited (ASX: ALL), $23.92 billion

(Market capitalisations as at market close on 7 February 2023)

Why our Foolish writers love these ASX growth stocks

Vmoto Ltd

What it does: Vmoto manufactures and sells scooters worldwide, with a strong focus on electric-powered, two-wheel vehicles.

By Bernd Struben: Vmoto's e-scooters aren't like the rentals you see on urban footpaths. Rather, they are high-quality products, even suitable for commercial use.

With the world moving towards zero emissions, I believe the electric scooter phenomenon is likely only in its early days. And, in my opinion, this makes Vmoto a promising ASX growth share.

The Vmoto share price is down by around 12% in 2023, which could represent a good buying opportunity. And, I believe the market appears to have underappreciated some strong Q4 2022 figures.

These included a 19% increase in total units sold from FY21 and a 58% increase from FY20. As at 31 December, the company had a net cash position of $28 million, with no bank debt.

Motley Fool contributor Bernd Struben does not own shares in Vmoto Ltd.

IkeGPS Group Ltd

What it does: Based in New Zealand, Ike predominantly services customers located in North America with software and hardware solutions that help collect, analyse, and manage assets associated with electricity and communication networks.

By Mitchell Lawler: The growth companies that get me really excited are the ones operating in traditionally stagnant and 'boring' industries. These are often enormous, mature markets that are ripe for innovation.

IkeGPS brings cloud-based software to utility providers – making power pole assessment faster, safer, and easier. The offering is clearly a success with its customers, with Tuesday's third-quarter update showing a 134% increase in year-to-date revenue to $23.3 million.

I believe the economics of the business are highly attractive. Namely, the 'platform transactions' and 'platform subscriptions' revenue streams.

As Ike continues to roll out its offering, I think the small marginal cost of providing the software to more customers means this company could be extremely profitable in the future. Not to mention the massive tailwinds associated with the deployment of 5G and maintenance of aging infrastructure.

Motley Fool contributor Mitchell Lawler does not own shares in IkeGPS Group Ltd.

BetaShares Global Cybersecurity ETF

What it does: This exchange-traded fund (ETF) invests in a basket of global shares all involved in the cybersecurity industry.

By Sebastian Bowen: When I put my mind to thinking about which trends might be growth engines of the next decade, cybersecurity tops my list. Last year was a potent reminder of the importance of cybersecurity in our increasingly digital world.

It's pretty obvious that companies, individuals, and governments will all be paying plenty of cash for the foreseeable future to secure both their own and their customers' data.

The BetaShares Global Cybersecurity ETF is, I believe, a perfect way to capitalise on this long-term tailwind. The fund holds some of the top cybersecurity companies in the world, including names like Fortinet, Cisco, Okta, and CrowdStrike.

As of 31 December, this ETF had returned an average of 14.15% per annum since its inception in 2016. With cybersecurity growing ever more important, I think there is a good chance this stellar performance track record can continue in 2023 and beyond

Motley Fool contributor Sebastian Bowen does not own units of the BetaShares Global Cybersecurity ETF.

Johns Lyng Group Ltd

What it does: The company describes itself as an integrated building services group that delivers building and restoration services across Australia and the US. The core business is rebuilding and restoring properties and contents after damage from insured events, including impact, weather, and fire events.

Johns Lyng's client base includes major insurance companies, commercial businesses, local and state governments, body corporate/owner corporations, and retail customers.

By Tristan Harrison: The Johns Lyng share price has dropped close to 20% since early December and more than 30% since April.

That's despite the company projecting that its FY23 business-as-usual (BaU) revenue will rise by 27% to $930 million, and its FY23 BaU earnings before interest, tax, depreciation and amortisation (EBITDA) will increase by 43% to $93 million.

I think these numbers demonstrate that profit is scaling faster than revenue, with rising margins – an attractive feature.

I believe Johns Lyng is executing well on expanding its presence in Australia and the US. It is also growing its bolt-on services. Plus, it's a beneficiary of the unfortunate increase in more costly climate impacts, such as the floods in Victoria and NSW last year.

Motley Fool contributor Tristan Harrison does not own shares of Johns Lyng Group Ltd.

Domino's Pizza Enterprises Ltd

What it does: Domino's is a fast-food staple around the globe. It operates a network of more than 3,100 stores across 10 countries and has plans to continue growing its slice of the pizza pie in the years to come.

By Brooke Cooper: When I look for growth shares, I aim to seek out companies I think are capable of growth in nearly all economic environments. I believe Domino's fits that bill.

The company operates in the discretionary space, and the 'affordable' end at that.

While its price-to-earnings (P/E) ratio is relatively high right now – at around 39 times – I think the pizza chain's intended growth trajectory is worth it.

Domino's grew its footprint by 450 stores in FY22 and plans to better that in FY23. And I'm not alone in my bullishness.

Morgans has slapped the stock with a $90 price target – a potential 25% upside at the time of writing.

Motley Fool contributor Brooke Cooper does not own shares of Domino's Pizza Enterprises Ltd.

Aristocrat Leisure Limited

What it does: Aristocrat Leisure is a gaming technology company that owns a portfolio of industry-leading poker machines and digital games.

By James Mickleboro: My ASX growth share to buy this month is ASX 200-listed Aristocrat Leisure.

I believe the gaming technology company is well-positioned to deliver solid, long-term growth thanks to its leadership position in a growing market, its recent expansion into the potentially lucrative real-money gaming sector, and its very strong balance sheet.

With the company sitting on a mountain of cash right now, it has the opportunity to potentially boost growth with earnings-accretive acquisitions or return funds to shareholders via buybacks.

Motley Fool contributor James Mickleboro does not own shares of Aristocrat Leisure Limited.

The post Top ASX growth shares to buy in February 2023 appeared first on The Motley Fool Australia.

And while Bell Potter remains cautious on the outlook for the tech sector in the first half of 2023, it still sees opportunities for investors.

The broker notes that it is "attracted to stocks in the tech sector with reasonable cash flows/ earnings now or in the short term and which also have reasonable to strong growth outlooks."

It believes "these sorts of stocks will perform well – even in a rising interest rate environment – given the outlook of slowing growth and the risk of recession globally."

With that in mind, listed below are the broker's three top ASX tech shares to buy in 2023:

Frontier Digital Ventures Ltd (ASX: FDV)

Bell Potter is a fan of this digital classifieds company and has a speculative buy rating and $1.23 price target on its shares. It commented:

FDV remains catalyst rich owing to its private equity-style portfolio management, noting FDV LATAM was recently valued at 5.0x CY22e revenue and portfolio crown jewel Zameen generated a likely valuation uplift following a funding round by its majority owner, EMPG, with both assets flagged for listings down the track. Although the operating environment remains uncertain, a China re-opening and tapering/pivot of US interest rates would potentially be a positive for performance in emerging markets.

IkeGPS Group Ltd (ASX: IKE)

Another ASX tech share that the broker is positive on is this integrated GPS data capture device provider. Bell Potter currently has a speculative buy rating and $1.21 price target on its shares. It explained:

IKE delivers operational efficiencies within Utilities and Communications companies and related Engineering firms by replacing legacy processes with hardware and software solutions. In addition to posting 1H23 revenue growth of 169.8% vs. pcp to $15.4m, which was roughly equal to its full year FY22 revenue of $16m, IKE also delivered a maiden interim positive operating cash flow and statutory net profit. The result was driven largely by increasing transaction volumes as use of its software and services grows within IKE's enterprise clients. IKE's business activity is underpinned by the $310 billion fibre and 5G rollout in North America, which offers IKE the opportunity to embed its solutions within clients.

Life360 Inc (ASX: 360)

Finally, Bell Potter remains very positive on this location technology company and has a buy rating and $9.00 price target on its shares. The broker believes Life360 is well-placed for further strong growth in 2023 thanks to price increases and the bundling of recently acquired products. It commented:

Life360 develops and delivers a mobile app for families – called Life360 – that provides communications, driving safety and location sharing. The company has also recently made two acquisitions – Jiobit and Tile – so that now it not only connects and protects people but also pets and things. The core business has been performing very well though the acquisitions have had a difficult 12 months (due to supply chain constraints and/or a drop in consumer electronics demand). The outlook for 2023, however, is positive with recent price rises in the core business likely to drive strong top line growth and the bundling of Tile products with subscriptions to provide a further boost to subscription revenue.

The post Bell Potter names the ASX tech shares to buy in 2023 appeared first on The Motley Fool Australia.

At the time of writing, the 3D geospatial data technology company's shares are down 5.5% to 50.5 cents.

Why is the Pointerra share price falling?

Investors have been selling down the Pointerra share price after broad market weakness offset the release of a positive announcement.

According to the release, the company has won a number of contracts during September. This includes a $1.55 million contract with Florida Power & Light across four projects.

In addition, the company has signed contracts with Pacific Gas & Electric and Gridvision worth ~$0.25 million each.

What are the contracts covering?

The deal with Florida Power & Light includes a vegetation growth predictive analytics project. This will study and model the likely impact on powerline infrastructure of growth in vegetation adjacent to the powerline network over a 16-month period.

Using multiple aerial captures with multiple sensors over the project period, Pointerra3D will model change (delta) in vegetation growth and use the delta combined with species detection analytics to predict vegetation growth.

Management notes that the expected outcome for Florida Power & Light is better scheduling of vegetation management activities, which is a significant part of the utility's ongoing network asset management operations.

In addition, other projects with Florida Power & Light include weather related network change detection and the demonstration of the integration of IkeGPS Group Ltd's (ASX: IKE) highly regarded Poleforeman utility pole engineering software into Pointerra3D.

What else?

The contract with Pacific Gas & Electric is similar to the main Florida Power & Light contract. It is a vegetation management analytics project.

Whereas, finally, the contract with Gridvision is for mine powerline data capture and analytics campaigns for the power infrastructure network of a global tier-one miner's Australian operations.

Management believes the endorsement of the Pointerra3D solution by electrical engineering teams could accelerate adoption and spend by its mining sector customers as other business units are exposed to the technology and how it can solve their specific challenges.

The post Pointerra (ASX:3DP) share price lower despite new contract wins appeared first on The Motley Fool Australia.

At Friday's close, Ikegps shares were trading at $1.095, not far off the 52-week high of $1.24 they briefly hit last November.

Company background

Ikegps is a niche company specialising in software and hardware measurement tools. It uses laser technology to capture geospatial data, including an object's height, width and distance. At first glance, this might seem like too specialised a product offering to be profitable, but this sort of technology is crucial to the design and implementation of large infrastructure and utility projects.

In fact, Ikegps already has contracts with a number of US telecommunications giants, including AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). The company's measurement technology helps these customers build and maintain their networks.

Recent financials

Ikegps released its FY21 report earlier this month (covering the 12 months ending 31 March 2021). Business headwinds stemming from the COVID-19 pandemic meant that revenues declined slightly year on year – from NZ$9.8 million in FY20 to NZ$9.3 million in FY21. Gross margin also declined, from NZ$6.9 million in FY20 to NZ$5.9 million in FY21, and the company blew out its net operating loss after tax from NZ$6.1 million to NZ$7.4 million.

Despite the subdued financial performance, Ikegps claimed it has laid a solid foundation for growth, citing a strong sales pipeline, healthy balance sheet, and a wide-ranging product suite. And there were some silver linings buried in the financial results. Ikegps closed a record number of new contracts in the fourth quarter of FY21, and that momentum seems to have carried over into the first few months of FY22.

Ikegps closed contracts worth a total of NZ$5.4 million in the last quarter of FY21, with most of that revenue expected to be recognised during FY22. In the first eight weeks of FY22, Ikegps closed contracts worth a further NZ$3.4 million, meaning it is almost on track to deliver back-to-back record quarters.

Other news

Last Wednesday, the company announced another set of material contract wins. Ikegps extended an agreement with an engineering company involved in the development of telecommunications infrastructure, and also signed a new contract supporting a separate network project in the US. Ikegps will be hoping that the recent contract wins are the first signs of a sustained increase in demand from North America as their economy emerges from the pandemic.

Ikegps share price snapshot

As well as its impressive gains over the past 12 months, the Ikegps share price has also rallied by more than 19% over the past month. Based on its current valuation, this ASX tech share has a market capitalisation of around $146 million.

The post This under-the-radar ASX tech share has gained 65% in the last 12 months appeared first on The Motley Fool Australia.

At the time of writing, the IKE share price is up 4.6%, trading at 90 cents apiece.

IKE collects and analyses pole and overhead asset data for utilities and engineering firms. Below we take a look at the company's latest news.

What did IKE report this morning?

The IKE share price is lifting after the company reported it had extended an agreement with a Fortune 100 United States electric utility. IKE is working with the company to assess and design its infrastructure.

The contract extension will boost IKE's transaction revenue in the 2022 financial year (the period ending 31 March 2022) by $1.2 million. On the newly extended agreement, the utility customer's contract value has increased more than 4-fold since the initial contract was signed in October 2020.

IKE reported the utility would make use of its platform to evaluate some 350,000 power pole assets. The contract goes into effect immediately.

What did management say?

IKE CEO Glenn Milnes welcomed the contract extension, saying:

The expansion of this existing customer contract demonstrates the value that the IKE platform provides to large electric utilities, and confirms our ability to expand the use of our platform over time across targeted tier-1 infrastructure operators…

We are also pleased with the broader strength of new contract wins over the quarter to 31 March, of approximately $5.4 million, and now with contract wins in the initial weeks of Q1 FY22, of approximately $2.2 million. This provides real momentum for growth for our FY22 to March 2022.

Atop the contract extension announced today, IKE added that it closed record contracts in Q4 (ending 31 March) for approximately $5.4 million. The company will record most of that revenue in the 2022 financial year.

IKE's full-year revenue for the 2021 financial year came in at roughly $9.3 million. That figure, still subject to audit, is in line with market expectations.

IKE share price snapshot

Over the past 12 months, IKE shares have outperformed, up 53% compared to the 34% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date, the IKE share price has gone the other way and is down 17% so far in 2021.

The post Why the IkeGPS (ASX:IKE) share price is surging today appeared first on The Motley Fool Australia.

At the time of writing, the ikeGPS share price is holding today's 10% gain at $1.10.

So what are the terms of the agreement?

In today's announcement, the company said the Visual Globe assets were expected to deliver revenue targets totalling US$21 million over the period to March 2024 (80% of the total earn-out). It would also retain key people to 31 March 2024 (20% of the total earn-out).

Following ikeGPS's initial payment of US$3.3 million, an additional US$4.99 million of cash and up to $2.1 million in ikeGPS shares will be paid to Visual Globe. The additional payments are based on how the Visual Globe assets perform over the three-year period ending 31 March 2024.

Arrangements like this are referred to as 'earn out payments'. Some investors see these as a nice insurance policy to ensure that the assets acquired perform to expectations.

What type of assets did ikeGPS acquire?

The ikeGPS technology is used to measure and locate utility poles. This information can be then used to improve electrical infrastructure. We spoke more about what ikeGPS technology gets up to back in September.

Through the Visual Globe arrangement, ikeGPS will benefit from additional resources that enable the company to incorporate new tools in its utility pole analysis services. This includes access to drones and smart phone technology. This means that ikeGPS can collect and analyse significantly higher amounts of data, a valuable service to the company's target markets.

On the topic of target markets, Visual Globe is a US-based company with established relationships in the North American market. Will this new exposure lead to opportunities that keep the ikeGPS share price moving in a positive direction?

What lies ahead for the ikeGPS share price?

Commenting on the deal, ikeGPS CEO Glenn Milnes said:

This transaction with Visual Globe allows IKE to expand our addressable markets and adds important advanced bulk data collection & analysis capability.

This enables IKE to continue to disrupt often inefficient or manual work practices across the electric utility and communications markets.

As ikeGPS stretches its legs into new markets, investors have reacted positively so far. We'll learn more about how the deal will work out as the company progresses deeper into the three-year arrangement.

The post The ikeGPS (ASX:IKE) share price has rocketed up 10% today. Here's why. appeared first on The Motley Fool Australia.

Ike designs, markets and sells integrated GPS data capture devices, related software and consulting solutions. The group's sales activities is divided into two segments: utility & communications, and new business. Key products include ikeGPS and Spike.

What's driving the ikeGPS share price lower

For the period ending September 30, Ike reported revenue of $4.4 million, down 15% over the prior corresponding period (pcp). The company said despite the drop in revenue, this was a solid result during a Q1 period disrupted by COVID-19.

Ike noted that no customers or material pipeline contracts were lost, but rather network projects had been deferred.

Gross margin came to $2.9 million, around 67%, which was lower than the 72% attained over the first half of FY20. Fixed costs from Ike's analysis segment were maintained, with the left-over capital used to improve operating efficiency going forward.

Operating expenses increased to $6.3 million compared to the $4.9 million spend on the comparable period. The additional splurge related to the company's investment strategy focusing on growing the capability for its sales, solutions engineering, delivery and marketing teams. In-turn, this is expected to support its sales pipeline, customer onboarding and the overall customer experience for large infrastructure clients.

The group made an operating loss of $2.5 million for the first-half of the 2021 financial year. This compares to a $1.1 million loss in the pcp.

Ike recorded $21.9 million in cash and receivable at the end of September, with no debt.

Outlook for FY21

With focus now on the second-half of the year, Ike remains committed to delivering contracts on time. Furthermore, the company will also seek to push revenue opportunities through upselling its products to existing customers.

Ike revealed that significant tailwinds in the industry have the potential to flow through the company. It has predicted that more than $350 billion will be invested into fibre and 5G infrastructure during the next five years. This translates to more than 3,000 electric utilities needed for network build and maintenance.

About the IkeGPS share price

The IkeGPS share price has increased by almost 40% since the start of August. While the company has been positioning itself for future growth, its field data collection product and laser measurement tools are proving successful. Ike reached a 52-week high of $1.24 on Tuesday.

The post Why the ikeGPS (ASX:IKE) share price is lifting today appeared first on The Motley Fool Australia.

Why is the ikeGPS share price on the move?

The company advised that momentum had picked up, after COVID-19 affected revenues in the first quarter of the 2021 financial year. Orders for Q2 are expected to be approximately $3 million. This is above FY20 run rate levels. Ike achieved this through being granted 'essential business' status in the United States, which supports critical infrastructure development and maintenance.

The company concluded an oversubscribed capital raising of $19.7 million, with which it plans to grow sales and delivery capability. Ike will also assess additional acquisition opportunities that may arise.

What does ike do?

Ike operates in the designing, marketing and sale of integrated GPS data capture services, related software and consulting solutions. The group's key products include ikeGPS and Spike.

ikeGPS is a field data collection product that uses the latest mobile hardware and software to measure and locate utility poles. This in-turn allows accuracy and efficiency for aerial fibre deployments and repairs by users.

Spike is the world's first laser accurate smartphone measurement tool that captures real time measurements. The software product uses the phone camera, laser-based system and mobile app to determine location, heights, width and distance.

Ike's software and hardware has been widely used by electric utilities, communications and engineering services in North America. Most notably, ikeGPS is adopted by one of the world's largest communication companies, AT&T.

What did management say?

Chair Rick Christie was pleased with the company's performance over the past year. He said:

FY20 was a busy and productive year for our business with continued growth and improvement across key metrics. Our core target market has also continued to develop positively, being tier-1 US communications companies, electric utilities and their engineering service providers. Success within this market is the key long-term value driver for our business.

Mr Christie touched on Ike's determination to be an industry leader.

In keeping with our ambition to be the pole standard in the North American market and to increase our suite of products to pole owners and users, we also acquired certain assets of PowerLine Technology Inc. (PLT) in the period, one of the leading structural analysis software companies in North America.

Post-acquisition activities have been positive with all major PLT customers renewing their annual software licenses post-acquisition, and IKE Analyze cross-sell opportunities with PLT customers have also emerged. In the future IKE will continue to investigate and pursue growth by further acquisitions of relevant market products and technologies.

Where to from here?

I think the tech company has been making small tailwinds since COVID-19 affected its business in Q1. Ike has been busy optimising its internal processes and positing itself for future growth.

I do like what Ike has to offer and will be adding the ikeGPS share price to my watchlist for now.

The post Why the ikeGPS (ASX:IKE) share price has climbed today appeared first on The Motley Fool Australia.