3 small cap ASX shares that analysts rate as buys this month

Have you checked out these small caps? Analysts are feeling bullish about them.

| More on:
A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

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

Investors with a high tolerance for risk might want to check out these small cap ASX shares in this article.

That's because they have been named as buys and tipped to rise materially from current levels. Let's see what brokers are saying about them:

4DMedical Ltd (ASX: 4DX)

Bell Potter says that 4DMedical is a small cap ASX share to buy right now. It is a software technology company commercialising its patented imaging platform, XV Technology.

It is a four-dimensional lung imaging technology that utilises proven, patented mathematic models and algorithms to convert X-ray scans into quantitative data to enhance the capacity of physicians to manage patients with respiratory diseases and diseases of the lung.

Bell Potter currently has a speculative buy rating and 75 cents price target on its shares. Commenting on the company, the broker said:

The US market alone is estimated at up to 73m lung assessments annually. The technology has the potential to replace each of the existing modalities for the assessment of lung function. The initial target markets are luminary hospital sites in the US and specifically in-patient CT Scans of which there are ~10.9m performed in the US each year.

Adairs Ltd (ASX: ADH)

Analysts at Morgans think that investors should consider buying this homewares retailer's shares. Especially if you're looking for a source of income on top of handsome capital gains. The broker has an add rating and $2.20 price target on the small cap ASX share. It said:

Sales were even harder to come by in FY25 than we'd expected as reduced traffic both in-store and online resulted in a 7% decline on a 52-week basis. This was nearly 2% below our estimate. Costs, however, were well controlled, limiting the comparable decline in EBIT to 15%, 4% below our estimate.

Although the start to FY25 was soft, we have reason to expect sales to pick up as the year goes on. If Adairs can achieve a better sales outcome while maintaining good discipline over pricing and operating costs, FY25 should be a year of positive earnings growth. A dividend yield of 7% underpins our retention of an ADD rating and $2.20 target price.

IPD Group Ltd (ASX: IPG)

A third small cap ASX share for investors to look at is IPD Group. It is a leading distributor of electrical equipment and industrial digital technologies.

Bell Potter is also a fan of the company and has a buy rating and $6.00 price target on its shares. It believes the company is well-placed for growth in the coming years. The broker said:

We continue to view IPD as one of the most attractive ways to play electrification across multiple end markets. The stock remains a top pick among our Industrials coverage.

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. has positions in and has recommended Adairs and Ipd Group. The Motley Fool Australia has positions in and has recommended Adairs and Ipd Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Small Cap Shares

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Small Cap Shares

These small cap ASX shares could rise 50% to 65%

The team at Bell Potter is bullish on these names. Let's find out why.

Read more »

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 »