Here's why the broker thinks they could be buys for investors with a high tolerance for risk:

Mach7 Technologies Ltd (ASX: M7T)

The first small-cap ASX share that could be a buy according to Morgans is Mach7. It is a provider of medical imaging software, delivering advanced data management and diagnostic viewing solutions to healthcare organisations worldwide.

Morgans was pleased with its quarterly update and the achievement of operating cashflow breakeven. It said:

M7T posted its 2Q26 cashflow report, reporting a breakeven operating cashflow following marked improvements in cash collection and a streamlined expense position through normalised billing and lower staff costs. ARR remained stable at A$23.0m, while CARR declined to A$26.1m following the known VHA and Trinity headwinds, partially offset by the first Flamingo Architecture customer win and growth from existing clients.

Execution momentum strengthened, including positive RSNA-generated leads, improved eUnity KLAS scores, and cost-outs across the organisation. Positive update and M7T appears seeded for good growth opportunities into FY27. No changes to forecasts or target price and our Buy recommendation remains.

Morgans has a buy rating and 76 cents price target on its shares.

Micro-X Ltd (ASX: MX1)

Another small-cap ASX share that has been given the thumbs up is Micro-X. It is a technology company developing and commercialising a range of innovative products for global health and security markets. These are based on proprietary cold cathode, carbon nanotube (CNT) emitter technology.

Morgans was pleased with Micro-X's quarterly update and believes there is more to come, with 2026 looking like a transformational year. It said:

MX1 posted a solid 2Q26 cash flow report. Highlights included a capital raise which has taken the funding question off the table and receipt of the largest Rover Plus order to date. Key catalysts to focus on include: receipt of additional Rover sales orders; commencement of Head CT human imaging trial; and monetisation of non-core security assets. We have made no changes to our forecasts or valuation. We maintain our SPECULATIVE BUY recommendation and believe 2026 will be a transformational year for MX1.

Morgans has a speculative buy rating and 16 cents price target on its shares.

The post Morgans names 2 small cap ASX shares to buy appeared first on The Motley Fool Australia.

Let's see what the broker is saying about them and whether it thinks they are in the buy zone right now:

A2 Milk Company Ltd (ASX: A2M)

Morgans was pleased with this infant formula company's strong start to FY 2026 and has upgraded its estimates to reflect this.

However, while it is a fan of the company, it feels that its shares are fair value at current levels and has retained its hold rating with a $9.40 price target. It said:

A2M has had a stronger than expected start to FY26 and consequently, it has upgraded its sales and NPAT guidance. We have upgraded our forecasts and forecast strong growth from FY27 onwards. While we rate the company and its management team highly, we believe that the stock is trading on fair multiples (FY27 PE of 31.5x and PEG of 1.8x). We maintain a Hold rating with a new price target of A$9.40.

Mach7 Technologies Ltd (ASX: M7T)

Morgans has responded positively to the release of this enterprise image management systems provider's strategic transformation plans. It believes it positions the company for sustainable growth in the coming years.

As a result, the broker has retained its buy rating with a trimmed price target of 76 cents. This is almost 70% higher than where its shares trade today. It said:

M7T released its strategic transformation plans at its AGM, introducing a customer-focused operating model and the upcoming Flamingo AI platform to drive long-term growth, efficiency, and new revenue through modernised imaging solutions. Despite potential near-term revenue softness, the transformation is well-aligned with industry trends and positions M7T for sustainable growth and signals genuine innovation and a commitment to delivering what radiology customers want.

VEEM Ltd (ASX: VEE)

A third ASX share that Morgans has been looking at is marine, defence, and mining products manufacturer.

While its recent trading update was softer than expected, the broker remains positive and sees plenty of upside for investors. In light of this, it has upgraded its shares to a speculative buy rating with a $1.10 price target. This implies potential upside of 30% for investors from current levels. It commented:

VEE's AGM update was softer than expected, primarily due to delays in receiving ASC orders and a hold-up in obtaining security clearance for the Hunter-class propeller project. Additionally, anticipation around the launch of the Mark III gyro led to purchase hesitancy among potential customers in 1H26. These delays have shifted some work to 2H26, which management expects to be stronger, driven by significant contributions from defence (particularly ASC).

While the trading update was disappointing, we believe VEE's outlook remains positive with multiple growth opportunities across defence (eg, HII, Northrop Grumman, Hunter Class Frigate Program), propulsion (VEEM Extreme, Sharrow), and gyros (Mark III). Timing of order flow remains uncertain, which is likely to cause earnings volatility in the near term. However, the long-term earnings potential of these opportunities remains significant.

The post Morgans gives its verdict on A2 Milk and these ASX shares appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Betr Entertainment Ltd (ASX: BBT)

The Betr share price is up 3.5% to 29.5 cents. This follows news that the sports betting company is not giving up on its takeover approach for Pointsbet Holdings Ltd (ASX: PBH). Betr revealed that it plans to make an off-market, all-scrip takeover offer for all shares in PointsBet not already held. The offer will be 3.81 Betr shares for every 1 PointsBet share on issue. Betr's chair, Matt Tripp, commented: "This is a compelling opportunity to consolidate value in the Australian wagering sector. Our offer provides PointsBet shareholders with flexibility—either cash for immediate liquidity or the ability to participate in the long-term upside of the combined entity. We're offering real value, execution certainty, and the leadership experience needed to deliver."

Centuria Capital Group (ASX: CNI)

The Centuria Capital share price is up almost 2% to $1.74. This morning, analysts at UBS took their sell rating off this property company's shares and have upgraded them to a neutral rating with an improved price target of $1.81. UBS is feeling positive about the property sector due to falling interest rates and rising rents.

GR Engineering Services Ltd (ASX: GNG)

The GR Engineering Services share price is up almost 6% to $3.25. This morning, this engineering services company announced a new contract win. It has been awarded an engineering, procurement and construction (EPC) contract by AIC Mines Ltd (ASX: AIM) for the expansion of the existing Eloise copper processing facility in northern Queensland. Managing director, Tony Patrizi, said: "GR Engineering is pleased to have been selected by AIC Mines for the delivery of the Eloise Copper Expansion Project. GR Engineering has a strong track record of successful project delivery in Australia in the base and precious metals sector, including in northern Queensland. We look forward to working with the AIC Mines team on the Project as it expands its existing processing facility."

Mach7 Technologies Ltd (ASX: M7T)

The Mach7 share price is up 3% to 34 cents. This follows news that it has signed a five-year licence agreement amendment for a total contract value (TCV) of A$5 million. The medical technology company has signed the contract with a longstanding key customer, which is an unnamed large US-based radiology marketplace. Mach7 CEO Mike Lampron said: "The agreement highlights our focus on building lasting relationships with our customers and the importance of our 'land and expand' strategy. It also demonstrates the strength of our value proposition and the significant ROI that our diverse product offering delivers to our customers."

The post Why Betr, Centuria Capital, GR Engineering, and Mach7 shares are pushing higher appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are climbing:

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 4% to 66.5 cents. This morning, analysts at Bell Potter retained their buy rating on this counter drone technology company's shares with a trimmed price target of $1.10. The broker said: "Whilst DroneShield's performance over the last 12-months did not meet expectations, the near-term outlook is considerably more positive. The value of contracts received YTD (~$47.8m) is evidence of increased levels of customer activity and DRO is well placed to meet this demand having materially increased the scale of its operations and heavily invested in its inventory levels. We retain our BUY recommendation."

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price is up 6% to $1.51. This morning, the energy producer released its quarterly update and revealed a 3% decline in fourth quarter production on a net revenue interest (NRI) basis to 2.59 MMboe. However, fourth quarter sales volumes were 53% higher at 3.14 MMboe due to the timing of Bauna liftings. This resulted in sales revenue of US$222.2 million for the period. In a separate announcement, Karoon Energy revealed plans to undertake a further US$75 million on-market share buyback over the course of the 2025 calendar year.

Mach7 Technologies Ltd (ASX: M7T)

The Mach7 share price is up almost 12% to 38 cents. This follows news that the medical imaging technology provider is launching a $5 million on-market share buyback. The company revealed that its board considers the buy-back to be an efficient use of capital given the strength of its balance sheet and strong cash inflows to date. It also notes that it is "part of the Company's ongoing capital management strategy and highlights the Board's confidence in Mach7's future growth prospects."

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is up 2.5% to $10.73. This may have been driven by broker notes out of Morgan Stanley and UBS this morning. In response to strong Australian wine export data, the brokers have reaffirmed their buy ratings. Morgan Stanley has an overweight rating and $14.60 price target, whereas UBS has a buy rating and $14.00 price target. Both price targets imply potential upside of at least 30% for investors over the next 12 months.

The post Why DroneShield, Karoon Energy, Mach7, and Treasury Wine shares are charging higher appeared first on The Motley Fool Australia.

Wait, wait – before you stop reading, hear me out!

Sure, the company's share price is down over 50% this year. And yes, the company posted a net loss of $8 million in FY24. I'll admit, on paper, things don't look great.

But this is a company in transition, and if it can deliver on its strategy in 2025, I think it could reward investors with a little faith.

What does Mach7 do?

Mach7 is a medical imaging company that provides services to hospitals, research facilities, and other medical institutions. The company's imaging platform is capable of integrating, standardising, and even interpreting data from many different sources. The aim is to give doctors and other healthcare professionals all the information they need to make optimal medical decisions for their patients.

How have Mach7 shares performed this year?

It's fair to say that Mach7 hasn't had the greatest 2024. At the time of writing, it looks likely that the stock price will end the year at least 50% lower. However, it has also been a transformative period for the company.

Over the past few years, Mach7 has been switching to a subscription-based business model. From a long-term perspective, this makes sense because the revenue the company generates from these contracts is actually higher. However, because it is recognised over the lifetime of the contract rather than upfront, the change dampens short-term revenues.

And that's exactly what happened in the company's FY24 results. Despite generating record numbers of new sales orders, year-on-year revenues were down 3%, and the company reported a net loss of $8 million. Frustrated shareholders—unassured by the company's insistence that the subscription-based strategy was working—decided to jump ship.

The Mach7 share price took a further hammering after the company released its first quarter FY25 business update on 31 October 2024. Although the company reaffirmed its outlook for revenue growth of 15% to 25% for FY25, investors were unimpressed with the company's sluggish first-quarter performance.

Why could 2025 be a breakout year for Mach7 shares?

A subscription-based business model can be better for both the business and its shareholders. It means the business has more confidence in its future revenues, making it easier for it to do things like budget, grow, and even pay dividends.

In FY24, recurring revenues from subscription contracts made up 72% of total revenues, a significant uplift from the 52% they contributed in FY23. This trend held up in the first quarter of FY25, where 65% of sales orders were from subscription, maintenance and other recurring fees.

If Mach7 can deliver on its revenue growth target for FY25, and if the majority of that comes from recurring revenues, this could make the company a much safer investment in years to come.

That's why, in a few years' time, I think we might all look back on 2025 as the year everything changed for Mach7.

What are the risks?

Mach7 is a small-cap growth stock, which makes it a higher-risk investment.

Because growth stocks are often junior companies with no track record of success, most of their current value depends on investors' expectations about their future profitability. Any changes to those expectations—especially those caused by changes in inflation or interest rate projections—can have an outsized impact on the prices of growth shares. This can make the share prices particularly volatile, making them suitable only for investors with a high-risk tolerance.

However, one advantage Mach7 has over other junior growth stocks is that it is debt-free. Junior companies are often highly leveraged—until they get their business off the ground, they usually have to borrow money to sustain their operations. This makes them particularly vulnerable to interest rate rises because it means they have to pay more to service that debt. For this reason, an investment in Mach7 may possibly be a little safer than other ASX growth stocks, given there is still plenty of uncertainty around what rates will look like next year.

The post 2025 could be a breakthrough year for Mach7 shares: Here's why appeared first on The Motley Fool Australia.

If you do, you might want to check out the small cap ASX shares named below that brokers are tipping as buys with potential for massive returns.

Let's see what they are saying about these stocks:

Camplify Holdings Ltd (ASX: CHL)

The first ASX small cap share to look at is Camplify. It is one of the world's leading peer-to-peer digital marketplace platform providers for the recreational vehicle (RV) industry.

The team at Morgans is very bullish on the small cap. It has an add rating and $2.55 price target on its shares. This suggests that its shares could more than double in value from current levels.

It likes the company due to its positive long term growth outlook thanks to opportunity both at home and internationally. It said:

We expect CHL to continue to grow into its large addressable market locally, with over 790k registered RVs in Australia and ~130k in NZ. CHL only has ~2% of these on its platform. It has broadly doubled its domestic fleet since listing and with its acquisition of Germany- based PaulCamper (PC) now has a total fleet of over 29,000, making it a true global player.

IPD Group Ltd (ASX: IPG)

Another small cap ASX share that could be a buy is IPD Group. It is a national distributor and service provider to the Australian electrical market.

Bell Potter is bullish on the company and has a buy rating and $6.20 price target on its shares. This implies potential upside of 31% for investors.

The broker believes its is well-placed for growth in the coming years due to the electrification megatrend. It commented:

IPD Group distributes electrical equipment and technologies that support energy efficiency in building, infrastructure, and process sectors. Demand for upgrades in existing infrastructure and the scaling of IPG's EV charging business should drive future revenue and market share expansion. The group is well-positioned to capitalise on electrification trends in energy and transportation to support earnings growth.

Mach7 Technologies Ltd (ASX: M7T)

A final small cap ASX share that has been named as a buy is Mach7. It is an enterprise image management systems provider.

Analysts at Morgans are also feeling bullish on this small cap. The broker has an add rating and $1.36 price target on its shares. This is more than triple its current share price.

Morgans believes the company is positioned to deliver further strong growth over the medium term. It said:

Mach7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

The post 3 small cap ASX shares to buy for massive returns appeared first on The Motley Fool Australia.

Let's see what they are saying about these stocks:

Aeris Resources Ltd (ASX: AIS)

Bell Potter thinks that this copper miner could be a great option for investors right now.

The broker currently has a buy rating and 27 cents price target on its shares. Based on its current share price of 17 cents, this implies potential upside of 59% over the next 12 months.

Bell Potter believes the company would be a great option for investors looking for copper exposure. It explains:

AIS is a copper dominant producer with all its assets in Australia. Its near-term outlook is highly leveraged to the copper price and increasing grades and production at the Tritton copper mine. Successful delivery offers significant upside and a strategically attractive asset in Tritton, making AIS vulnerable as a corporate target. Retain Buy.

Camplify Holdings Ltd (ASX: CHL)

Another ASX small cap stock to look at is Camplify. It operates one of the world's leading peer-to-peer digital marketplace platforms, connecting recreational vehicle (RV) owners to hirers.

Morgans is feeling very bullish. It has an add rating and $2.55 price target on its shares, which suggests that upside of 92% is possible from current levels.

The broker highlights the company's positive long term growth outlook thanks to opportunity both at home and abroad. It said:

We expect CHL to continue to grow into its large addressable market locally, with over 790k registered RVs in Australia and ~130k in NZ. CHL only has ~2% of these on its platform. It has broadly doubled its domestic fleet since listing and with its acquisition of Germany- based PaulCamper (PC) now has a total fleet of over 29,000, making it a true global player.

Mach7 Technologies Ltd (ASX: M7T)

A third small cap ASX share that has been named as a buy is Mach7. It is an enterprise image management systems provider.

Morgans is also feeling bullish on this name. It has an add rating and $1.36 price target on its shares. This is more than double its current share price.

It believes the company is well-placed to deliver further strong growth over the medium term. The broker said:

Mach7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

The post 3 small cap ASX shares to buy for very big returns appeared first on The Motley Fool Australia.

Shares of the ASX health tech company closed on Friday at a new 52-week low of just 53 cents apiece. Long-term investors will be especially disappointed with the stock's continued poor performance. As recently as 2021, their shares were selling for over $1.50 a pop.

The market clearly wasn't impressed by the company's most recent financial results released last Wednesday. The company reported a net loss of $8 million for the year, and the Mach7 share price has dropped 12% since then.

But, if you take a closer look at the numbers, there are some hints that Mach7's new subscription-based business strategy could finally be starting to pay off.

If I'm right, Mach7 could soon be due for a rebound – which means its shares might be going for a bargain right now.

What does Mach7 do?

Mach7 develops medical imaging technology solutions for hospitals and other medical institutions, including universities and research facilities.

Its software integrates imaging data from different sources, providing doctors and other medical professionals with a central platform to view patient data. It connects different databases, standardises different data formats, and even helps healthcare providers interpret images to make diagnostic decisions.

The goal is to give doctors quick and easy access to the information they need to improve patient outcomes.

What's caused the drop in the Mach7 share price?

Over the past few years, Mach7 has been increasingly transitioning to a subscription-based business model.

Under this model, the revenue Mach7 earns per contract is actually higher, but it is delivered over the lifetime of the contract rather than upfront. This means that, as the company transitions, year-on-year revenues are likely to fall — at least until it starts making enough revenue from new subscriptions to offset the loss of upfront fees.

This was borne out in the company's most recent financial results. FY24 revenues were down 3% versus FY23, while the company's net loss increased a whopping 660% to almost $8 million.

But the interesting thing is that although its revenues were lower, Mach7 actually took in record numbers of new sales orders. It's just that 83% of them were subscription-based, versus 58% in FY23.

Mach7 points to these stats as evidence that its strategy is succeeding. However, many shareholders frustrated with the company's short-term financial performance are jumping ship, forcing the share price lower.

Why could Mach7 shares be a bargain right now?

The recurring revenues generated by a subscription-based model provide Mach7 – and its shareholders – with greater confidence about the company's future earnings. But, as we've explained, transitioning to this model can mean a hit to short-term revenues.

The good thing for Mach7 is that it seems to be nearing the end of its transition period. Just 6% of orders came from capital software sales in FY23, and recurring revenues increased 29% year-on-year to $21 million (out of total revenues of $29 million).

The company's outlook for FY25 is getting much rosier. It is targeting revenue growth of between 15% and 25%, which would be a significant turnaround versus this year's performance.

Delivering on these targets could restore investors' faith in the management over at Mach7 and quickly drive up its share price.

As with any penny stock, the risks from investing in Mach7 are high – but they might be worth it for growth-oriented investors.

The post Why I think this ASX penny stock is a bargain at its 52-week low appeared first on The Motley Fool Australia.

Mach7 Technologies shares have not performed well over the past year, falling more than 22%.

Can this ASX small-cap company turn the tide here and have a chance to become the next Pro Medicus Limited (ASX: PME)?

Let's find out what the company reported for FY24.

Transition to subscription-based business continues

Key highlights from Mach7's FY24 results include:

• Sales orders increased by 52% year-on-year to $61.3 million in terms of total contract value.
• Revenue fell 3% to $21.1 million due to ongoing transition to recurring revenue.
• Annual recurring revenue (ARR) was up 29% to $21.1 million and represented 72% of the total revenue, up from 54% in FY23.
• Operating expenses increased by 13%, in line with management guidance.
• Adjusted earnings before interests, taxes, depreciation, and amortisation (EBITDA) fell from $2.5 million in FY23 to a loss of $2 million in FY24.
• Net profit after tax (NPAT) deteriorated to a loss of $8 million, compared to a $1 million loss in FY23.
• Operating cashflow turned positive to $3.5 million, in line with management guidance.

What else happened in FY24?

Mach7 continues to move towards subscription-based models, particularly in North America.

Subscription and maintenance contracts now dominate Mach7's sales orders, comprising 83% of the total, and representing a substantial increase from previous years. This transition is underscored by a decline in capital software sales, which have decreased significantly in favour of subscription models.

Renewals accounted for $37.5 million or 61% of total sales, a record high for the company, while new customers, including significant projects like the Veterans Health Administration, contributed $13.2 million or 22%.

A slight decrease in overall revenue in FY24 was primarily due to the short-term impact of the subscription transition. Recurring revenue now represents 72% of total revenue, underpinned by steady growth in ARR. This trend highlights Mach7's resilience and the stability provided by its subscription-based business model.

However, weak revenue led to weaker profits for the past financial year, reflecting the anticipated short-term financial impacts of their strategic transition.

On a positive note, the company achieved a positive operating cash flow of $3.5 million, demonstrating robust cash management and financial discipline amidst its growth initiatives.

FY25 guidance

Looking ahead, the company has a strong sales pipeline across different regions, care settings and product combinations.

The company guided for 15% to 25% revenue growth in FY25. Management expects the company's operating expenses to grow slower than revenue growth, leading to margin expansion.

Mach7 CEO Mike Lampron said:

Looking ahead to FY25, our priorities will centre around the addition of net new logos as our pipeline continues to grow and generate opportunities across multiple geographies and product combinations.

We will also undertake targeted investment in our people, processes and tools to further differentiate Mach7 from its competitors. This investment will focus on product innovation and reflect a customer-centric mindset.

Share price snapshot

Mach7 shares are down 4.54% to 56.5 cents at the time of writing.

The post Can this ASX healthcare stock, down 22% in a year, turn the tide after FY24 results? appeared first on The Motley Fool Australia.

After all, the potential returns on offer at the small end of the market can be significant. Though, it is always worth remembering with this greater reward, comes greater risk.

With that in mind, let's take a look at three small cap ASX stocks that have been tipped to rise strongly from current levels. Here's what you need to know about them:

Aroa Biosurgery Ltd (ASX: ARX)

Analysts at Bell Potter think that Aroa Biosurgery could be a small cap ASX stock to buy right now.

It is a wound repair specialist company that uses a decellularised extra cellular matrix derived from ovine (sheep) gut.

Bell Potter has been impressed with the company's performance in FY 2024 and expects more of the same in the coming years. It explains:

The Myriad product achieved the highest rate of revenue growth in FY24. It is applied in the surgical setting to provide a substrate for regeneration of soft tissue and for reconstructive surgery. In FY24 revenues grew by 75% to NZ$23.3m and we expect a similar growth rate in FY25 and FY26 driven by an expanded user base and data from the Myriad Augmented Soft Tissue Regeneration Registry (MASTRR). ARX also expects to report data from its 120 patient randomised clinical trial in diabetic foot ulcer patients. The trial is investigating the healing properties of the Symphony product. Earlier studies in a very difficult patient population with advanced DFU's provided highly supportive data on the rate of wound healing.

Bell Potter has a buy rating and 90 cents price target on its shares. This suggests that upside of 42% is possible over the next 12 months.

Camplify Holdings Ltd (ASX: CHL)

Another ASX small cap share that has been named as a buy is Camplify. It is the number one player in ANZ in the peer-to-peer RV rental space.

Morgans is a fan of the company due to its huge growth opportunity at home and abroad. It explains:

We expect CHL to continue to grow into its large addressable market locally, with over 790k registered RVs in Australia and ~130k in NZ. CHL only has ~2% of these on its platform. It has broadly doubled its domestic fleet since listing and with its acquisition of Germany- based PaulCamper (PC) now has a total fleet of over 29,000, making it a true global player.

The broker has an add rating and $2.55 price target on its shares. This implies potential upside of over 100% for investors.

Mach7 Technologies Ltd (ASX: M7T)

A third small cap ASX share that has been named as a buy is Mach7. It is an enterprise image management systems provider.

Morgans is feeling positive about the company's outlook and is forecasting strong revenue growth in the coming years. It said:

Mach7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

The broker has an add rating and a $1.56 price target on its shares. This suggests that its shares could more than double in value from current levels.

The post 3 small cap ASX stocks that could rise 40% to 100%+ appeared first on The Motley Fool Australia.

But which small-cap ASX shares should you buy?

Listed below are three that Morgans rates very highly. Here's why it is bullish and has them on its best ideas list:

Acrow Ltd (ASX: ACF)

The first small-cap ASX share that Morgans is bullish on is Acrow. It provides the construction sector with engineered formwork, scaffolding, and screen systems solutions.

Morgans likes the company due to its positive long-term outlook, attractive valuation, and generous dividend yield. It said:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long term, especially on the east coast. Momentum remains strong and recent acquisitions will provide new avenues for growth, especially in the more stable and less cyclical Industrial Services segment. We believe the valuation remains attractive (~7.5x FY25F PE and ~5.5% yield) with potential positive catalysts from further meaningful contract wins.

The broker currently has an add rating and a $1.43 price target. This implies a potential upside of 25% for investors.

Camplify Holdings Ltd (ASX: CHL)

Another ASX small-cap share that Morgans rates highly is Camplify. It is the number one player in ANZ in the peer-to-peer RV rental space.

The broker believes that Camplify has a significant growth opportunity both at home and abroad. It said:

We expect CHL to continue to grow into its large addressable market locally, with over 790k registered RVs in Australia and ~130k in NZ. CHL only has ~2% of these on its platform. It has broadly doubled its domestic fleet since listing and with its acquisition of Germany- based PaulCamper (PC) now has a total fleet of over 29,000, making it a true global player.

Morgans has an add rating and a $2.85 price target on its shares. This suggests that a potential upside of almost 60% is possible from current levels.

Mach7 Technologies Ltd (ASX: M7T)

Finally, Morgans is also feeling positive about this enterprise image management systems provider and sees it as an ASX small-cap share to buy. Its analysts believe Mach7 is well-positioned to deliver very strong sales growth over the coming years. They said:

Mach7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

The broker has an add rating and a $1.56 price target on its shares. This implies a massive upside of over 100% for investors.

The post Morgans rates these ASX small-cap shares as best buys appeared first on The Motley Fool Australia.

But with inflation cooling and the prospect of rate cuts coming, the little guys are starting to play catch up to the medium and large caps.

Here are three ASX "penny stocks" that I think could break out above the 80 cent barrier in the future:

'More cleanup to be done in Australia' than anyone can handle

The first two stocks are both related to improving the environment, which is why I think they have a bright future.

Certainly in recent years nations around the world have become more conscious of damage to the planet, and both these companies provide solutions.

Environmental Group Ltd (ASX: EGL) is best described as an engineering firm that provides technologies to combat air pollution, water pollution, and produce energy from biowaste.

A couple of years back, Marcus Today founder Marcus Padley attested that landing work would be no trouble for Environmental Group.

"There is more cleanup to be done in Australia that EGL could possibly handle," he said.

"This is just a question of getting around the technology. It's not a question of finding things to do."

Both Bell Potter and Taylor Collison rate EGL shares as a strong buy currently, according to CMC Invest.

The analysts love these ASX penny stocks

Close The Loop Ltd (ASX: CLG) provides take-back and recycling solutions that enable a circular economy.

Ink and toner cartridges are a major program, with batteries, cosmetics and soft plastics in its remit.

CMC Invest shows both Shaw & Partners and Unified Capital Partners rating the stock as a strong buy.

The Motley Fool's Tristan Harrison named it as one of the small caps he is intrigued by, as it is "growing revenue, improving margins and [has] appealing growth potential".

"I think quality smaller companies are capable of outperforming bigger businesses over the long term because their growth runways are longer."

Meanwhile, Mach7 Technologies Ltd (ASX: M7T) creates management systems for medical images in hospitals.

All five analysts surveyed on CMC Invest are rating the healthtech stock as a buy, so it must be heading in the right direction.

Contract wins from big hospitals will be the catalyst for Mach7 shares to break through the 80 cent mark in the future.

The post 3 ASX penny stocks I don't think will be below 80 cents much longer appeared first on The Motley Fool Australia.

In morning trade, the ASX health technology share is up 7% to a 52-week high of 97.5 cents.

Why is this ASX share shooting higher?

Investors have been scrambling to buy the company's shares this morning after it announced a major contract win.

According to the release, the medical imaging software solutions company has signed a new licence agreement with Diagnostic Imaging Associates worth a total of $3.7 million.

As part of the contract, Mach7 will provide its eUnity Diagnostic Viewer solution to Diagnostic Imaging Associates for general diagnostic interpretation and mammography diagnostic reading.

It will be based on a subscription licensing model, with the contract expanding the use of eUnity beyond an original 75,000 annual study agreement for mammography remote reading to a licence covering the full spectrum of eUnity's diagnostic tools for 1.2 million studies annually. This represents a 16-fold volume increase.

The agreement is for five years, with management estimating that it will boost its annual recurring revenue (ARR) by $0.64 million.

The ASX share's CEO and managing director, Mike Lampron, said:

Market research continues to evidence a dynamic shift in where and how patients want to receive healthcare. This is amplified by the tightening of reimbursement rules by North American payers for non-emergency imaging due to the additional price tag placed on imaging by acute care providers. DIA represents a large, growing practice that is benefiting from the shift in diagnostic imaging from acute care to ambulatory settings and we are delighted to now provide its 70-strong radiologist practice with the full functionality of our zero-footprint eUnity Diagnostic Viewer.

The post Why this little ASX healthtech share is charging 7% to a 52-week high on Friday appeared first on The Motley Fool Australia.

But which small cap ASX shares should you buy? Listed below are two that Morgans rates very highly. Here's why it is bullish on them:

Acrow Formwork and Construction Services Ltd (ASX: ACF)

The first small cap ASX share that Morgans is bullish on is Acrow. It provides engineered formwork, scaffolding, and screen systems solutions to the construction sector.

Morgans likes the company due to its belief that it is well-placed to benefit from growing civil infrastructure activity across the east coast. It also highlights its attractive valuation and even more attractive dividend yield. It said:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long-term, especially on the east coast. We believe the valuation remains attractive (~7x FY23F PE and ~6.5% yield) with potential positive catalysts from further meaningful contract wins.

The broker has an add rating and 84 cents price target on its shares. This suggests potential upside of 23% for investors over the next 12 months based on the current Acrow share price.

Mach7 Technologies Ltd (ASX: M7T)

Morgans is positive on this enterprise image management systems provider. It believes Mach7 is well-positioned to deliver strong top line growth over the coming years. It explained:

Mach 7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

The broker currently has an add rating and $1.34 price target on its shares. So, with the Mach7 share price currently fetching 73 cents, this implies potential upside of 83% for investors over the next 12 months.

The post Broker says these small cap ASX shares offer big returns potential appeared first on The Motley Fool Australia.

Will rising inflation and recession fears derail the carriage again in 2023? Or will China fully reopen and central banks turn dovish to prevent any major big dippers?

Stay tuned! But in the meantime, we asked our Foolish contributors for their thoughts on which are the best shares to bring joy to your ASX ride in 2023.

Here is what the team came up with:

7 best ASX shares for January 2023 (smallest to largest)

• Mach7 Technologies Ltd (ASX: M7T), $164 million
• Elders Ltd (ASX: ELD), $1.58 billion
• Deterra Royalties Ltd (ASX: DRR), $2.43 billion
• Metcash Limited (ASX: MTS), $3.75 billion
• iShares Global Consumer Staples ETF (ASX: IXI), $4.06 billion
• Allkem Ltd (ASX: AKE), $7.18 billion
• Qantas Airways Limited (ASX: QAN), $10.99 billion

(Market capitalisations as of 4 January 2023)

Why our Foolish writers love these ASX shares

Mach7 Technologies Ltd

What it does: Mach7 Technologies provides and develops image management and viewing solutions in the healthcare sector. The core of these offerings is its Mach7 Enterprise Imaging Solution.

By Bernd Struben: Mach7 is on the smaller end of the investment spectrum with a market cap of some $165 million. Yet it has a global reach into the large and growing medical imaging markets.

In the first quarter of FY23, the company reported annual recurring revenue (ARR) of $17.9 million, up 3.2% from the prior quarter. While cash receipts were down from the prior quarter, Mach7's balance sheet was solid, with $21.5 million in cash and no debt.

The company kicked off 2023 announcing the largest customer contract in its history. The 10-year deal with NASDAQ-listed Akumin Inc has a total contract value of approximately $16.7 million. The Mach7 share price surged 18% on the day of the announcement. But I believe there could be more gains in the months ahead.

Motley Fool contributor Bernd Struben does not own shares in Mach7 Technologies.

Elders Ltd

What it does: Elders is an agribusiness company providing services for those in industries such as livestock, wool, and grain. It also offers real estate services, home loans, and insurance products, among other various avenues.

By Brooke Cooper: A new year has dawned, and it's likely brought plenty of new investing opportunities. Alas, I've got my eye on an old one.

Elders has been around for more than 180 years, but the last one has been particularly rough on its share price. It's fallen 16% over the last 12 months.

Recent selloffs in the company have been excessive, in the eyes of both myself and broker Goldman Sachs.

The broker believes Elders is "very well-positioned to grow through the cycle", slapping it with a buy rating and an $18.40 price target. This represents a potential 82% upside.

Motley Fool contributor Brooke Cooper does not own shares in Elders Ltd. 

Deterra Royalties Ltd

What it does: Deterra Royalties collects a fee from royalty assets it holds in its portfolio. The main contributor to the company's financials is its royalty over the Mining Area C iron ore mining operation in the Pilbara region.

By Mitchell Lawler: Inflationary pressures have shone a light on businesses with low operational costs. Companies with minimal employee expenses, material costs, and debt could be well situated this year. 

Deterra Royalties appears to be one such company thanks to its royalty business model. Due to the lack of capital-intensive operations, Deterra touted a 97% gross profit margin in FY22 and a net income margin of 67%. 

The risk to this company's bottom line is iron ore demand. There is concern stemming from China's challenging exit from a zero-COVID policy. However, I'd expect China will find its feet eventually, much like the rest of the world. 

Motley Fool contributor Mitchell Lawler does not own shares in Deterra Royalties Ltd.

Metcash Limited

What it does: Metcash operates three different divisions. It is a food supplier for independent supermarkets around Australia, namely IGA, and a liquor supplier for brands such as Cellarbrations, The Bottle-O, IGA Liquor and Thirsty Camel. The company also owns hardware brands, including Mitre 10, Homeware Timber & Hardware and Total Tools.

By Tristan Harrison: Investors looking for stability during this uncertain time could do well with Metcash, in my opinion. I think its food and liquor earnings can be resilient, as we saw during the COVID-19 period. The Australian population's continued growth could be a boost, particularly for the food division.

I'm excited by the potential of the hardware division as it expands its number of locations and grows profitability. The hardware division is now making the most profit and saw 8% sales growth in the first four weeks of the FY23 second half.

According to Commsec, Metcash could pay a grossed-up dividend yield of 7.7% in FY23, which would boost total returns.

Motley Fool contributor Tristan Harrison does not own shares in Metcash Limited.

iShares Global Consumer Staples ETF

What it does: This exchange-traded fund (ETF) represents a basket of global companies specialising in consumer staples products like food, drinks, vices and household essentials.

By Sebastian Bowen: Happy New Year! Like 2022 before it, 2023 is shaping up to be a year of unknowns and risks. Rising interest rates have led to predictions of another recession this year.

 With all of this uncertainty, I think it's a good time to turn to companies that can thrive in all economic climates: consumer staples. No matter what the economy is doing, we all need to eat drink and keep our homes running.

As such, I believe that the iShares Consumer Staples ETF, housing top-notch names like McDonald's, Kellogg and Colgate-Palmolive, provides a solid foundation for an ASX share portfolio in the new year.

Motley Fool contributor Sebastian Bowen owns shares in McDonald's.

Allkem Ltd

What it does: Allkem is a speciality lithium products company with a global portfolio of diverse and high-quality lithium chemicals.

By James Mickleboro: My first pick this year is lithium miner Allkem. The lithium industry has been going through a tough period in recent weeks amid concerns that prices have peaked. And while a peak was inevitable eventually, this doesn't mean the end of the road for Allkem. Far from it!

Thanks to its plan to grow production four times over in the coming years, it remains well-placed to continue generating bumper profits even as prices ease.

In fact, even Goldman Sachs, which is extremely bearish on lithium prices, believes Allkem shares are a buy. It currently has a buy rating and $15.20 price target on them.

Motley Fool contributor James Mickleboro owns shares in Allkem. 

Qantas Airways Limited

What it does: Qantas is Australia's leading operator of international and domestic air transportation services. It also provides freight services and has a lucrative frequent flyer loyalty program.

By James Mickleboro: Another ASX share that I would buy this month is Australia's flag carrier airline, Qantas. Despite its shares smashing the market in 2022, I still believe they are attractively priced. Especially given how the airline has come out the other side of the pandemic as a significantly stronger business.

For example, Goldman Sachs forecasts FY 2023 earnings per share almost 60% higher than FY 2019's pre-COVID levels. And that's despite the company operating with a group capacity 20% lower than 2019 levels. Yet despite this, Qantas shares have closed out the year notably lower than where they ended 2019.

Goldman currently has a conviction buy rating and an $8.20 price target on its shares.

Motley Fool contributor James Mickleboro does not own shares in Qantas. 

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

Shares in the ASX listed medical imaging systems provider leapt more than 20% on open and are currently up 18.4% in morning trade.

Here's what's piquing ASX investor interest today.

What did the company report?

The Mach7 share price is rocketing after the company announced it has inked a multi-year deal with a Total Contract Value (TCV) of approximately $16.7 million.

The signed sales order comes from a new customer, Akumin Inc, a NASDAQ listed outpatient radiology service provider with a large footprint amongst United States' hospitals, health systems and physician groups.

The contract involves Mach7's entire Enterprise Imaging Platform including its Vendor Neutral Archive (VNA), eUnity Diagnostic Viewer and Workflow Applications. Mach7 said this will enable it to provide true cloud-based, enterprise-wide imaging and informatics solutions.

Payments for the $16.7 million 10-year capital contract will be staged annually across the life of the contract. $7.5 million of revenue is expected to be recognised in the 2023 financial year. Annual support fees are weighted to the second half of the contract term.

Commenting on the largest customer contract in the company's history, which is helping send the Mach7 share price sharply higher, CEO Mike Lampron said:

Our vendor agnostic easily integrated product suite and migration services were key requirements for the massive data ingestion and consolidation associated with Akumin's cloud-focused radiology ecosystem.

This deal together with the recent sales order received from our new partner, Nuvodia increases our exposure to the fast-growing outpatient radiology market and demonstrates that our technology appeals to customers across the size spectrum.

Mach7 share price snapshot

The Mach7 share price went backwards in 2022, as you can see in the chart below. But longer-term investors are unlikely to be complaining, with shares up 211% over the past five years. For some context, the All Ordinaries Index (ASX: XAO) has gained 15% over that same period.

The post Mach7 signs $17 million contract – share price jumps 20% at open appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are pushing higher:

AGL Energy Limited (ASX: AGL)

The AGL share price is up 2% to $8.04. Investors have been buying this energy company's shares despite there being no news out of it. They may be looking for safe havens given the share market's current volatility.

Invictus Energy Ltd (ASX: IVZ)

The Invictus Energy share price is up 17% to 34.5 cents. Yesterday this energy explorer revealed that underwater drilling encountered fluorescence and elevated gas shows in multiple zones of the Upper Angwa primary target. Managing Director Scott Macmillan said: "We have had further encouraging signs from the Mukuyu-1 sidetrack well since drilling recommenced, with multiple zones encountering elevated gas shows and fluorescence in our Upper Angwa primary target proving relatively consistent with the original Mukuyu-1 well."

Maas Group Holdings Ltd (ASX: MGH)

The Maas share price is up 2% to $2.64. This is despite there being no news out of the construction materials, equipment and service provider. Though, it is worth highlighting that Goldman Sachs initiated coverage on the company this month with a buy rating and lofty $4.20 price target. This implies significant upside over the next 12 months.

Mach7 Technologies Ltd (ASX: M7T)

The Mach7 share price is up almost 2% to 57 cents. This morning, this medical imaging software solutions company announced a sales agreement with Nuvodia. The agreement is for Mach7's entire Enterprise Imaging Platform, which will provide a true enterprise wide PACS solution. The subscription contract has a five-year term and a total contract value of $2.5 million. Nuvodia is a US-based national IT and radiology service provider that creates, manages, and supports mission-critical IT environments.

The post Why AGL, Invictus Energy, Maas, and Mach7 shares are pushing higher today appeared first on The Motley Fool Australia.

Here's what the broker is saying about these small caps:

Acrow Formwork and Construction Services Ltd (ASX: ACF)

The first small cap ASX share that Morgans is tipping as a buy is Acrow Formwork and Construction Services. It is a leading provider of engineered formwork, scaffolding, and screen systems solutions as well as in-house engineering and industrial labour supply services to the construction sector.

Last month, Acrow released its full year results and revealed a 40% increase in revenue to $148.3 million and the doubling of its net profit after tax to $17.8 million.

Morgans was impressed and believes the company is well-placed for further growth. It also highlights that its shares trade on very low multiples despite this positive form. The broker commented:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long-term, especially on the east coast. We believe the valuation remains attractive (~6x FY23F PE and ~6.5% yield) with potential positive catalysts from further meaningful contract wins.

Morgans has an add rating and 80 cents price target on Acrow's shares.

Mach7 Technologies Ltd (ASX: M7T)

Another small cap ASX share that the broker is a fan of is Mach7. It is a medical imaging systems provider that develops innovative image management and viewing solutions for healthcare organisations.

As with Acrow, it was in fine form in FY 2022. For the 12 months, Mach7 reported a 42% increase in revenue to $27.1 million and a 253% jump in EBITDA to $2.8 million.

The good news is that Morgans expects this solid growth to continue in the coming years. The broker commented:

Mach 7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

Morgans has an add rating and $1.34 price target on Mach7's shares.

The post Broker names 2 small cap ASX shares to buy now appeared first on The Motley Fool Australia.

The two small cap ASX shares listed below have just been named as buys by analysts at Morgans. Here's what the broker is saying about them:

Mach7 Technologies Ltd (ASX: M7T)

The first small cap ASX share to look at is Mach7. It is a global provider of enterprise image management systems that allow healthcare enterprises to identify, connect, and share diagnostic image and patient care intelligence.

Morgans was pleased with the company's performance in FY 2022 and notes that its "story [is] becoming more compelling."

In response to the result, the broker retained its add rating and $1.34 price target on Mach7's shares. It commented:

M7T posted a strong FY22 result, with another year of record revenue up 42% on pcp, as well as a strong sales order pipeline which will drive growth in FY23 and beyond. Over the year, the business mix has trended towards more SaaS based deals (60/40 split) with customers increasingly open to transitioning from capital to subscription contracts. We view this as a positive trend with the market valuing SaaS contracts more highly. We have rolled forward our model, made no changes to our forecasts, and our DCF valuation remains unchanged at $1.34. Add maintained.

MotorCycle Holdings Ltd (ASX: MTO)

Another small cap ASX share that the broker is positive on is Australian motorcycle dealership and accessories group, MotorCycle Holdings.

Although the company reported a small decline in profits in FY 2022, it was still slightly ahead of Morgans' expectations. And while FY 2023 could be a tough year, the broker was pleased to see the company start the year with a large order book.

Overall, its analysts feel that its shares are trading on attractive multiples and offer significant upside potential. The broker has an add rating and $3.12 price target on its shares. It said:

MTO have commenced FY23 with a large order book; a bolstered inventory position; and a small bolt-on acquisition that is expected to contribute to FY23 earnings. However, while positive for FY23, MTO are preparing for likely subdued trading conditions against a softer consumer backdrop. Trading on ~7.5x FY24 PE; a solid balance sheet (~0.3x ND/EBITDA); ongoing favourable margin conditions (robust margin dynamic); a strong order book (near-term earnings support) and clear intent to continue to scale via acquisition, we consider MTO as offering solid value and maintain an Add rating.

The post Broker names 2 small cap ASX shares to buy in September appeared first on The Motley Fool Australia.

These are businesses that are thought of as longer-term opportunities because of their current valuations and their prospects of growth.

Brokers try to calculate where a company's share price is going to be in 12 months after their analyses of the business. That's called a price target. Price targets aren't guarantees, but just a guess and acknowledgement of how much potential growth the broker sees for the business. The bigger the price target, the more possible gains the broker thinks there is.

Let's look at two of the ASX share opportunities.

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a business that provides medical imaging systems that develops "innovative image management and viewing solutions for healthcare organisations".

It has more than 150 customers across 15 countries including integrated delivery networks, national health systems, medical research facilities, large academic medical institutions, regional community hospitals, private radiology practices, and independent provider groups.

Morgans currently rates it as a buy with a price target of $1.55. That implies a potential rise of more than 150% over the next year.

The broker took into account the ASX share's recent FY22 third quarter.

In that update, the business said it achieved net positive operating cashflows for the quarter of $0.5 million. It also generated record financial year to date earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.2 million, up $4.7 million or 306% on last year. Third-quarter sales orders rose $4.4 million to $26.5 million. It's also on track to deliver sales orders of $30 million for FY22.

The company also pointed to two new channel partnerships – AdvaHealth and Althea. On Althea, Mach7 said that it has a presence in 17 countries and will initially be working in Italy and the UK. There is also potential for further expansion in the EU.

BWX Limited (ASX: BWX)

BWX is a natural beauty business that has a number of brands including Sukin, Andalou Naturals, Mineral Fusion, and Go-To Skincare. The ASX share also sells products through the e-commerce sites Flora & Fauna and Nourished Life. It's looking to expand the brands to more countries.

The broker UBS currently rates BWX as a buy with a price target of $2.55. That implies a possible rise in the BWX share price of more than 80% over the next year.

BWX recently gave a market presentation that looked at various elements of the business.

The company has done a business-wide review of financial and operating performance, as well as ongoing initiatives to support a sustainable cost base. It has identified $5 million in extra costs it can cut to streamline its operating model. In particular, it's looking to improve its marketing return on investment (ROI) and achieve trade spend efficiency improvements.

As well, BWX is looking to grow its profit margins through various initiatives including price increases, increased manufacturing capacity, and improved operational efficiency.

The company is expecting to grow its revenue by between 20% to 25% in FY22 while the mid-point of the underlying EBITDA guidance could mean growth of around 3%.

Using UBS' estimates on the ASX share, the BWX share price is valued at 17 times FY22's estimated earnings and 11 times FY23's estimated earnings.

The post Brokers rate these 2 top ASX shares as buys in June 2022 appeared first on The Motley Fool Australia.