Are you looking for small cap ASX shares to buy? If you are, you may want to check out the two listed below that have been tipped as buys by brokers.
Here's why brokers are bullish on these small cap shares:
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Airtasker Ltd (ASX: ART)
The first small cap ASX share to consider is this online marketplace provider for local services.
Management believes that it has a significant growth opportunity ahead of it. In fact, it estimates that it has a total addressable market (TAM) of $600 billion across Australia, the UK, and the US. This compares to the gross marketplace volume of $189.6 million that it achieved in FY 2022.
Morgans remains a big fan of Airtasker and believes it is well-placed for long term growth thanks to its huge TAM opportunity. It explained:
Whilst acknowledging the current volatile market conditions and broader sector sentiment, we continue to remain attracted to the strong growth opportunity ahead for ART, predicated on the company successfully implementing its strategy of penetrating the prodigious TAM opportunity both domestically and offshore.
Morgans has an add rating and $1.05 price target on the company's shares.
Nitro Software Ltd (ASX: NTO)
Another small cap ASX share that could be a buy is Nitro Software. It is a growing software company driving digital transformation in businesses around the world across multiple industries with its Nitro Productivity Suite.
Nitro's shares have been hammered this year due to the tech selloff and a recent guidance downgrade. And while the team at Goldman Sachs was disappointed with the update, it hasn't changed its view that Nitro has enormous long term growth potential.
Goldman explained:
We see the update as re-basing market expectations on NTO's growth outlook and highlighting the path to breakeven; however, we acknowledge that NTO will likely enter a "show me" phase where consecutive quarters of strong ARR performance are necessary to allay concerns over execution challenges. That said, we continue to see NTO as an undervalued global growth opportunity and highlight that the company now trades at ~12x FY24E EV/EBITDA on a capitalisation-adjusted basis.
The broker has a buy rating and $2.05 price target on its shares.
