Bell Potter is bullish on this ASX tech share and tipping 20% upside

Are you hunting for investment opportunities at the small end of the market?

If you are, then it could be worth hearing what Bell Potter has to say about the small-cap ASX tech share in this article.

Which small-cap ASX tech share?

Bell Potter has been running the rule over IkeGPS Group Ltd (ASX: IKE) shares this week.

It is a technology company that delivers a platform for the collection, measurement, analysis, and engineering data management of power pole infrastructure and associated networks. The company has a primary focus on the North American market.

The broker highlights that the small-cap ASX share has released its FY 2026 results and revealed financials that were largely in line with its forecasts. It said:

IKE’s FY26 was partially pre-reported at revenue and gross margin, which saw 33% growth in YoY subscription revenues to $19.2m and Group revenue growth of 6% to $26.6m, with transactions remaining challenged. EBITDA was mostly in-line with expectations at -$5.0m (BPe: -$4.5m) and net loss was also broadly as expected at – $7.5m (BPe: -$7.7m), which more than halved YoY. IKE finished the period with cash and equivalents of $32.8m following an in-period equity raise and an operating cash outflow of -$3.3m for the year.

Another positive is that the broker believes the company is well-placed to become profitable at the EBITDA line in FY 2027. It adds:

IKE reiterated commentary around FY27 guidance for similar subscription growth compared to FY26, which implies around $25.5m (exit run rate for the period was $20.7m). Subscription gross margin of 94% looks to support EBITDA/operating cash flow breakeven, noting IKE achieved positive EBITDA in March, while transaction headwinds look to continue through the early stages of FY27.

In addition to improving visibility on subscription revenues, IKE anticipates its current product pipeline now has the potential to generate more revenue than any product IKE has launched to date, though this not anticipated to be material until FY28 onwards.

Should you invest?

According to the note, Bell Potter has retained its buy rating and $1.21 price target on the small-cap ASX share.

Based on its current share price of $1.01, this implies potential upside of 20% for investors over the next 12 months.

Speaking about its buy thesis, the broker said:

We maintain our Buy recommendation. IKE is funded to continue development of its product suite in line with its customer council and to continue to embed itself within tier-1 utilities/communications firms during tailwinds in electrification, grid hardening, and communications capacity investment accelerated by AI/data centre infrastructure and severe weather events.

The post Bell Potter is bullish on this ASX tech share and tipping 20% upside appeared first on The Motley Fool Australia.

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