2 exciting small cap ASX shares that analysts say have huge potential

If you have room in your portfolio for some higher risk options, then the two small cap ASX shares listed below could be worth considering.

Both have been named as buys and tipped to rise materially from current levels. Here’s what analysts are saying about these small cap shares:

Camplify Holdings Ltd (ASX: CHL)

The first small cap ASX share that is highly rated is Camplify. It is one of Australia’s leading peer-to-peer (P2P) digital marketplace platforms connecting recreational vehicle (RV) owners with hirers.

Camplify has been growing at a solid rate in recent years and continued this in FY 2022. It has just released its full year results and revealed a 63% increase in gross transaction volumes to $53.6 million and a 94% jump in revenue to $16.4 million.

This went down well with the team at Morgans, which remain very bullish on the company’s prospects. The broker said:

Camplify (CHL) released its 4Q22 trading update, which in our view showed strong growth in key metrics and highlighted the underlying momentum in the business post lockdowns easing continued throughout the fourth quarter.

CHL’s management team has shown an ability to build out a successful scalable platform, in our view. Whilst still in its infancy and not without risk, we believe structural tailwinds supporting CHL and the prodigious opportunity offshore should provide longer-term growth potential for patient investors.

In light of the above, Morgans has put an add rating and $4.25 price target on the company’s shares.

Pentanet Limited (ASX: 5GG)

Another small cap ASX share to look at is specialist broadband provider Pentanet.

It recently released its full year results for FY 2022 and reported a 54.1% increase in revenue to $16.8 million. This was driven by strong demand for its internet services, which resulted in a 34.1% increase in internet subscribers to 16,674. In addition, cloud gaming subscribers grew to 182,000+ after only launching in October 2021.

The team at Bell Potter were impressed with the company’s performance and expect this solid growth to continue. Particularly given its exposure to global entertainment and data trends. It said:

We believe 5GG’s neXus rollout is a significant opportunity for the company to deliver high quality internet into the Perth metro region which is typically characterised by underperforming networks. Changing media consumption (e.g. streaming) and the proliferation of data downloaded are key drivers of internet premiumisation in Australia.

neXus is underpinned by Meta’s Terragraph technology which can enable gigabit internet at scale at high margin and relatively low cost to the consumer. 5GG is also exposed to the rapidly growing cloud gaming industry through the exclusive Australian distribution of NVIDIA’s GeForce NOW platform.

Bell Potter has retained its speculative buy rating on the company’s shares with a slightly trimmed price target of 56 cents.

The post 2 exciting small cap ASX shares that analysts say have huge potential appeared first on The Motley Fool Australia.

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More reading

• Camplify share price sinks 6% on growing FY22 losses
• Pentanet share price rips 10% higher on double-digit profit growth
• ‘Strong growth’: Expert says buy this ASX company that just doubled revenue
• Camplify share price leaps 6% as revenue more than doubles

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 Camplify Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pentanet Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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