2 small cap ASX shares to keep your eyes on

Whispir Ltd (ASX:WSP) and this small cap ASX share should be on your watchlist. Here's why…

| More on:
Woman in pink sweater lying on dock with binoculars to her eyes

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

At the small end of the market, there are a number of ASX shares with the potential to grow strongly in the future.

Two that should be on your watchlists are listed below. Here's what you need to know about them:

MNF Group Ltd (ASX: MNF)

MNF Group is a small cap ASX share to watch. It specialises in Voice over Internet Protocol (VoIP) technology which is used to support services like teleconferencing, online business meetings, and digital data transfers.

It looks well-placed for growth over the long term thanks to a number of favourable tailwinds. These include the NBN rollout and the work from home initiative.

The company is also expanding into the Asian market. In February it was on the cusp of entering Singapore and was looking at a further six markets in the region. 

This should be supportive of further recurring revenue growth in the coming years. Speaking of which, at the end of December, its recurring revenues stood at $55.7 million. This was up 15% on the prior corresponding period.

Morgan Stanley is a fan of the company. It currently has an overweight rating and $6.30 price target on its shares.

Whispir Ltd (ASX: WSP)

Another small cap share to watch is Whispir. It is a software-as-a-service communications workflow platform provider.

Whispir provides an industry-leading software platform that allows governments and businesses to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Demand has been increasing strongly, leading to stellar recurring revenue growth in recent years.

This continued in the third quarter of FY 2021. According to the release, at the end of March, the company's Annualised Recurring Revenue (ARR) was up 20.3% over the prior corresponding period to $50.3 million. This was also up 5.2% since the end of the second quarter.

However, it is still only scratching at the surface of its TAM. Management estimates that it has a total addressable market (TAM) of US4.7 billion in the just the United States.

Ord Minnett currently has a buy rating and $4.25 price target on its shares.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Small Cap Shares

Two brokers analysing stocks.
Small Cap Shares

Broker tips these 3 ASX small-cap healthcare stocks to rise 56%, 79% and 130%

These 3 ASX small-cap stocks could deliver substantial returns.

Read more »

growth charts with small cap written on a sticky note
Small Cap Shares

Expert names 3 ASX small-cap stocks to buy in July

ASX small-cap stocks have greater ability to generate outsized returns, but can be difficult to discover.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Small Cap Shares

Why I think this ASX small-cap stock is a bargain at $4.74

This business has excellent long-term growth potential.

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Small Cap Shares

Why I think this ASX small-cap stock is a bargain at $3.36

This business could continue revving higher…

Read more »

A young boy wearing a hat, sunnies and striped singlet looks fierce and flexes his arm in victory.
Small Cap Shares

Why this ASX small-cap stock has significant potential

This business is delivering significant growth.

Read more »

Five young boys wearing small caps sit on a bench together watching a baseball game.
Small Cap Shares

5 ASX small-cap shares that screamed 114% to 362% higher in FY25

Here are some examples of ASX small-cap shares that experienced outstanding price growth in FY25.

Read more »

Three young people in business attire sit around a desk and discuss.
Small Cap Shares

Tiny tech: 3 ASX small-cap shares with new ratings

Toby Grimm of Baker Young and Peter Day of Sequoia Wealth Management share their new ratings.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Small Cap Shares

Hidden gems: Experts name 3 ASX small-cap shares to buy now

One of these ASX small-cap shares has risen by a staggering 1,687% over the past 12 months.

Read more »