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If you have room in your portfolio for some higher risk options, the two ASX small cap stocks listed below might be worth considering.
Both have been designated as buys and are expected to increase significantly from current levels. Here’s what analysts are saying about these small cap stocks:
Camplify Holdings Ltd (ASX:CHL)
Camplify is the first highly rated ASX small cap stock. It is one of Australia’s leading peer-to-peer (P2P) digital marketplace platforms connecting Recreational Vehicle (RV) owners with rental companies.
Camplify has seen solid growth in recent years and continued that growth in fiscal 2022. It just released its full year results and revealed a 63% increase in gross transaction volumes to $53.6 million. and a 94% increase in revenue to $16.4 million.
It went well with the Morgans team, who remain very optimistic about the company’s prospects. The broker said:
Camplify (CHL) released its 4Q22 business update, which we believe showed strong growth in key metrics and highlighted the underlying dynamics in business following the easing of lockdown measures which continued throughout the fourth quarter.
CHL’s leadership team has demonstrated its ability to build a successful scalable platform, in our view. Although still in its infancy and not without risk, we believe the structural tailwinds supporting CHL and the prodigious offshore opportunity should provide longer-term growth potential for patient investors.
In light of the above, Morgans has placed an additional rating and price target of $4.25 on the company’s stock.
Another small-cap ASX stock to consider is specialist broadband provider Pentanet.
It recently released its full-year results for fiscal 2022 and announced a 54.1% increase in revenue to $16.8 million. This was driven by strong demand for its internet services, which led to a 34.1% increase in internet subscribers to 16,674. Additionally, the number of cloud gaming subscribers grew to more than 182,000 after its launch in October 2021.
The Bell Potter team has been impressed with the company’s performance and expects this strong growth to continue. Especially given its exposure to global entertainment and data trends. It said:
We believe the neXus deployment of 5GG is a significant opportunity for the company to deliver high quality internet in the Perth metropolitan area, which is typically characterized by underperforming networks. Changing media consumption (e.g. streaming) and the proliferation of downloaded data are major drivers of internet premiumisation in Australia.
neXus is based on Meta’s Terragraph technology which can enable large-scale gigabit Internet with high margin and relatively low cost to the consumer. 5GG is also exposed to the rapid growth of the cloud gaming industry through the exclusive Australian distribution of NVIDIA’s GeForce NOW platform.
Bell Potter retained its speculative buy rating on the company’s stock with a slightly reduced price target of 56 cents.