3 growing small cap ASX shares named as buys

These small caps have been tipped as buys…

| More on:
a happy investor with a wide smile points to a graph that shows an upward trending share price

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

If you're wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look. All three have been tipped for big things in the future.

Here's why these small cap ASX shares could be worth adding to your watchlist:

Adore Beauty Group Limited (ASX: ABY)

The first small cap to watch is Adore Beauty. It is a leading online beauty retailer which has been growing strongly. This has been underpinned by a significant lift in customer numbers thanks to the shift online. And as this shift is only really getting started in the beauty category, Adore Beauty appears very well positioned for growth over the long term.

Earlier this week Morgan Stanley put an overweight rating and $6.00 price target on its shares. It believes the company can grow strongly over the medium term.

Over The Wire Holdings Ltd (ASX: OTW)

Another small cap ASX share to add to your watchlist is Over The Wire. It is a telecommunications, cloud, and IT solutions provider that has a national network with points of presence in all major Australian capital cities. It offers a range of products and services to businesses including data networks and internet, voice, hosting and security, and managed services. In FY 2021 Over The Wire reported a 29% lift in revenue to $112.7 million and a 36% jump in EBITDA to $23.5 million.

Ord Minnett was pleased with its performance and expects more of the same in FY 2022. In response, it retained its buy rating and lifted its price target to $5.06.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX share to watch is Volpara. It is a growing MedTech software as a service company and the provider of breast imaging analytics and analysis products. These products improve clinical decision-making and support the early detection of breast cancer. Demand for its offering has been growing strongly, leading to annualised recurring revenue (ARR) rising to NZ$27.8 million this year. However, this is still only a fraction of its US$750 million addressable market in just breast cancer screening.

Morgans currently has an add rating and $1.87 price target on the company's shares.

Motley Fool contributor 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 has recommended Over The Wire Holdings Ltd and VOLPARA FPO NZ. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Over The Wire Holdings 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

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Small Cap Shares

Want to beat the stock market? I'd focus on buying these ASX shares

I think these ASX shares offer plenty of promise.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Small Cap Shares

Guess which small cap ASX stock is rocketing 28% on $100m deal

It has been a very good start to the day for owners of this stock.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Small Cap Shares

Bell Potter says this small cap ASX stock can rocket 40%+

Let's see what Bell Potter is saying about this small cap.

Read more »

A person sitting at a desk smiling and looking at a computer.
Share Market News

2 ASX small caps with serious market-beating potential

Here's two compelling ideas to add to your watchlist.

Read more »

Woman in business suit holds both hands out with a question mark above each hand.
Small Cap Shares

Building a market beating portfolio: ASX 200 stocks vs small caps

From blue-chip shares to small-caps what’s best for your portfolio?

Read more »

Two kids in superhero capes.
Small Cap Shares

2 small ASX shares to buy that have big potential

A fund manager is optimistic about these stocks.

Read more »

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Small Cap Shares

3 of the best small cap ASX stocks to buy now

Bell Potter thinks these shares are among the best to buy at the small end of town.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Small Cap Shares

Is this the best small cap stock on the ASX right now?

Bell Potter is very bullish on this small cap. Let's find out why.

Read more »