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

Two brokers analysing stocks.
Small Cap Shares

Broker tips these 3 ASX small-cap healthcare stocks to rise 56%, 79% and 130%

These 3 ASX small-cap stocks could deliver substantial returns.

Read more »

growth charts with small cap written on a sticky note
Small Cap Shares

Expert names 3 ASX small-cap stocks to buy in July

ASX small-cap stocks have greater ability to generate outsized returns, but can be difficult to discover.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Small Cap Shares

Why I think this ASX small-cap stock is a bargain at $4.74

This business has excellent long-term growth potential.

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Small Cap Shares

Why I think this ASX small-cap stock is a bargain at $3.36

This business could continue revving higher…

Read more »

A young boy wearing a hat, sunnies and striped singlet looks fierce and flexes his arm in victory.
Small Cap Shares

Why this ASX small-cap stock has significant potential

This business is delivering significant growth.

Read more »

Five young boys wearing small caps sit on a bench together watching a baseball game.
Small Cap Shares

5 ASX small-cap shares that screamed 114% to 362% higher in FY25

Here are some examples of ASX small-cap shares that experienced outstanding price growth in FY25.

Read more »

Three young people in business attire sit around a desk and discuss.
Small Cap Shares

Tiny tech: 3 ASX small-cap shares with new ratings

Toby Grimm of Baker Young and Peter Day of Sequoia Wealth Management share their new ratings.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Small Cap Shares

Hidden gems: Experts name 3 ASX small-cap shares to buy now

One of these ASX small-cap shares has risen by a staggering 1,687% over the past 12 months.

Read more »