The S&P/ASX Small Ordinaries Index (ASX: XSO) is 0.59% higher today and up 5.9% in the year to date.
ASX small-cap stocks are young, developing companies with a market capitalisation of between a few hundred million and $2 billion.
Let's take a look at three ASX small-cap stocks that have captured the attention of brokers this week.
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3 ASX small-cap stocks primed for growth: brokers
EML Payments Ltd (ASX: EML)
Tamim Asset Management maintains its bullish view on this ASX payment solutions provider.
The ASX small-cap financial stock is steady at 94 cents today and up 18% in the year to date.
In a new note this month, Tamim described EML Payments as being at a 'pivotal juncture'.
It noted the company's "strong revenue base" and opportunity to derive more value from its 1,100 customer relationships through cross-selling and expanded partnerships.
Tamim reckons EML shares are also an attractive takeover target, commenting:
…with a $95 million EBITDA target in three years versus a current EV [enterprise value] of approximately $350 million, EML presents itself as a compelling takeover candidate.
A bid in the range of $500-600 million ($1.50 per share) seems highly plausible within the next six months, offering significant upside for shareholders.
Bluebet Holdings (ASX: BBT)
Morgans has maintained its add rating on online sports betting company, Bluebet. It has also raised its 12-month share price target marginally from 35 cents to 36 cents.
The Bluebet share price is 30 cents per share on Tuesday, up 0.67% today and up 51% in the year to date.
Bluebet has a market cap of $170 million, which means it is technically an ASX micro-cap share.
In a new note, Morgans said Bluebet shares remain "attractive at current levels".
The broker explained:
November's net win margin was 12.8%, supported by robust trading and efficient promotions using its proprietary tech platform.
2QTD's margin stands at 11.5% and reassures us that the company is on track to meet earnings targets and build momentum for next year.
BBT confirmed it was EBITDA-positive in November and remains on course for an EBITDA-positive FY25 result.
… we expect 1H25 underlying EBITDA of $0.5m and a NPAT loss of $2.2m.
Our full-year earnings estimates for FY25-26F increase by 3.5% and 1% respectively.
Acusensus Ltd (ASX: ACE)
Acusensus develops AI solutions for road safety. It is also a micro-cap with a valuation of $158 million.
Canaccord Genuity has maintained its buy rating and $1.30 price target on this ASX tech share.
The Acusensus share price is $1.14, down 0.87% today but up 43% in the year to date.
In a new note, Canaccord analysts Owen Humphries and Annabelle Holden said momentum was building across all markets.
The analysts wrote:
ACE is in the early stages of its global expansion, leveraging its patented technology to capture the ~$1.8b global market opportunity.
The company is undertaking a period of investment to seize the opportunity with the global business absorbing cash, while the Australian business remains strongly earnings positive.
We estimate the Australian business generates revenues of $50m, with growth of 15%-20% with look-through EBITDA margins ~20%.
In our view, this implies the domestic business trades on 10x EV/EBITDA, with investors getting the large global expansion for free which we estimate generates >$4m revenue in FY25E at >100% growth rates and could be valued higher than the domestic business over time given the size of the opportunity.
