Are these ASX small-caps too cheap to ignore?

ASX small caps come with heightened risk, but increased upside compared to blue-chip shares.

However some investors may choose to allocate some portion of their portfolio to these kinds of equities. 

If you are looking to monitor small-caps, these two recently received updated guidance from brokers.

Here’s what the experts are predicting. 

Aroa Biosurgery Ltd (ASX: ARX)

Aroa Biosurgery is a New Zealand-based biomedical company specialising in  soft tissue regeneration. It develops, manufactures, and distributes medical and surgical products to improve the healing of complex wounds and soft tissue reconstruction.

The team at Morgans has provided updated guidance on the company following its FY26 preliminary results. 

The broker highlighted that the company upgraded FY26 revenue and EBITDA guidance. 

We have revised our forecasts in line with guidance and increased our risk free rate (house view) which results in a small downgrade to our DCF valuation to A$0.77 (was $0.79). ARX will release its FY26 results on 26 May which will include FY27 guidance. The market will focus on revenue growth (MorgansF sit at 15%) and commentary around the continuing momentum with Myriad and SymphonyTM. We maintain our BUY recommendation with investor sentiment towards the name improving.

This price target from Morgans indicates an upside potential of 20%. 

Titomic Ltd (ASX: TTT)

Another ASX small-cap drawing positive outlooks is Titomic. 

It’s TKF technology provides capabilities for producing commercially viable additively manufactured metal products competing directly with traditional manufacturing methods. The company serves to the aerospace, defence, sporting goods, medical, automotive, industrial equipment, construction and marine.

It recently received a reiterated buy recommendation from Bell Potter following its quarterly activities report. 

The broker was impressed with the fact that during the March 2026 quarter, the company progressed on a number of process qualification, commercial and leadership fronts.

Looking ahead, TTT is engaged with several tier one aerospace and defence prime contractors for qualification ahead of the potential for initial production agreements. Applications include engine components, pressure vessel, heat-shielding for hypersonics and maintenance work.

Bell Potter is optimistic on this ASX small-cap thanks to its competitive advantage. 

TTT’s TKFtechnology has several advantages over traditional casting and forging manufacturing process including shorter lead-times and production cycles and improved material properties.

The broker currently has a 50 cent price target on this ASX small-cap, which indicates an upside potential of more than 80% from the current share price hovering around 27 cents per share.

The post Are these ASX small-caps too cheap to ignore? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.