At the small end of the share market there are a number of companies growing at a rapid rate. Two that stand out right now are listed below.
Here's what you need to know about them:
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Booktopia Group Ltd (ASX: BKG)
The first small cap to watch is Booktopia. It is an online book retailer which has really caught the eye since its IPO late last year.
There was a time when many thought that Amazon's launch in Australia would kill off Booktopia, but it certainly hasn't been the case.
During the first half of FY 2021, the company shipped a total of 4.2 million units for the six months. This was up 40% on the prior corresponding period.
This led to Booktopia reporting a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million.
Analysts at Morgans appear confident there will be more of the same in the future.
In light of this, it has placed an add rating and $3.53 price target on its shares.
Universal Store Holdings Limited (ASX: UNI)
Another small cap ASX share to watch is Universal Store.
It is a fashion retailer delivering a frequently changing and carefully curated selection of on-trend items to a target 16-35 year old fashion focused customer.
Its offering is clearly resonating well with consumers. In February the company released its half year results and revealed a 23.3% increase in sales to $118 million.
And thanks to margin expansion, it posted a 63.6% increase in underlying net profit after tax to $21.1 million.
Positively, Universal Store started the second half strongly and looks well-placed to deliver a bumper full year profit result.
Morgans is also a fan of Universal Store. It currently has an add rating and $8.37 price target on its shares.
The broker believes the company can grow its earnings by a compound annual growth rate of 34% over the coming years.
