If you're a fan of small cap ASX shares, then you may want to add the two shares listed below to your watch list.
Here's what you need to know about these buy-rated small cap ASX shares:
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Readytech Holdings Ltd (ASX: RDY)
The first ASX small cap share to look at is Readytech. It is an enterprise software provider with a focus on underserved market verticals such as higher education and local government.
Demand for its sticky software continues to grow and has been underpinning strong revenue growth in recent years.
This continued in FY 2022, with Readytech reporting revenue of $78.3 million. This was up 16.8% on a like-for-like basis and ahead of its guidance of mid-teens organic growth.
The good news is that Goldman Sachs is forecasting more of the same in the coming years. It is expecting Readytech to "continue to grow mid-teens organically while making accretive acquisitions."
In light of its bullish view, Goldman currently has a buy rating and $4.60 price target on its shares.
Silk Laser Australia Limited (ASX: SLA)
Another small cap ASX share that has been tipped as a buy by brokers is Silk Laser.
It is the operator of one of Australia's largest specialist clinic networks, offering consumers a range of nonsurgical aesthetic products and services. These include laser hair removal, cosmetic injectables (botox etc), skin treatments, body contouring, and skincare products.
Demand for Silk's services has been strong in recent years and continued during the pandemic and then in FY 2022. This and recent acquisitions helped the company deliver a 91% increase in sales to $162.7 million.
And while the current economic environment could be difficult for consumer spending, management remains positive and "expects to continue its growth trajectory in FY23."
Wilsons is a fan of the company. The broker currently has an overweight rating and $3.62 price target on its shares.
