2 buy-rated small cap ASX shares analysts believe have 60%+ upside

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Investing in the small side of the share market carries more risk than other areas. However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.

For example, listed below are two small cap ASX shares that have been tipped to shoot materially higher from current levels. Here's what you need to know about them:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform and software as a service (SaaS) provider that connects consumers with trusted tradies. The Hipages platform helps tradies grow their business by providing job leads from homeowners and organisations looking for qualified professionals, while also enabling them to optimise their operations through its SaaS product.

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

The broker currently has a buy rating and $3.60 price target on its shares. This compares to the latest Hipages share price of $2.19.

Silk Laser Australia Limited (ASX: SLA)

Another small cap ASX share to watch closely is Silk Laser. It is one of Australia's largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. Silk's five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring, and skincare products. These services have remained popular during the pandemic, resulting in strong sales growth since its listing.

A note out of Wilsons last week reveals that it continues to rate Silk Laser highly. The broker was impressed with the company's strong growth during the first half in challenging trading conditions and remains positive on its long term growth potential.

Wilson has an overweight rating and $5.25 price target on the company's shares. This compares to the current Silk Laser share price of $2.94.

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 and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended SILK Laser Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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