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For investors with a high risk tolerance looking to boost their portfolios, small-cap ASX stocks offer significant potential returns. While these investments carry more risk, they also have the ability to deliver substantial growth. Here are two small-cap stocks that analysts have identified as worth considering this September:
- Aroa Biosurgery Ltd (ASX:ARX)
Bell Potter has highlighted Aroa Biosurgery as a small-cap ASX stock with significant upside potential. The company operates in the medical device space, focusing on advanced wound care and soft tissue reconstruction. Aroa's innovative technology utilizes a decellularised extracellular matrix derived from ovine (sheep) gut to accelerate wound healing and tissue regeneration.
Aroa's flagship product, Myriad, has been a key driver of its revenue growth. In FY24, the company achieved a 75% increase in revenue, with sales reaching NZ$23.3 million. This growth is expected to continue in FY25 and FY26 as the user base expands and more data from the Myriad Augmented Soft Tissue Regeneration Registry (MASTRR) becomes available.
Additionally, Aroa is conducting a 120-patient randomized clinical trial for its Symphony product, which is targeted at patients with diabetic foot ulcers (DFUs). Early data from difficult cases have been highly supportive of the product's healing capabilities, which could further enhance Aroa's growth prospects if the trial yields positive results.
Bell Potter has set a 90 cents price target for Aroa Biosurgery, implying a potential upside of 70% from its current share price.
- Camplify Holdings Ltd (ASX:CHL)
Another small-cap stock receiving positive attention is Camplify Holdings, which operates a peer-to-peer marketplace platform connecting recreational vehicle (RV) owners with hirers. Camplify's platform is available in several key markets, including Australia, New Zealand, the UK, Spain, Germany, Austria, and the Netherlands.
Morgans analysts are optimistic about Camplify's growth potential, both domestically and internationally. The company has access to a large addressable market, with over 790,000 registered RVs in Australia and 130,000 in New Zealand, but only 2% of these vehicles are currently listed on the platform.
Camplify has also doubled its domestic fleet since its listing, and its acquisition of Germany-based PaulCamper has boosted its global presence. With over 29,000 RVs now listed across its global platform, Camplify is well-positioned to capitalize on growing demand for RV rentals and expand its user base.
Morgans has issued an "add" rating on Camplify, with a price target of AU$2.55, suggesting the potential for the stock to more than double from its current level.
