3 exciting small cap ASX shares analysts are tipping for big things

Looking for some ASX small-cap shares to add to your portfolio? Then have a look at the three listed below.

Here’s why they could be worth considering for investors with a higher tolerance for risk:

Arafura Rare Earths Ltd (ASX: ARU)

Arafura Rare Earths could be a small-cap ASX share to buy according to analysts at Bell Potter. It is the owner of the Nolans Project, which aims to supply a significant proportion of the world’s neodymium and praseodymium (NdPr) demand in the future. These are critical minerals in the production of high-performance neodymium magnets, which are used in everything from mobile phones and electric vehicles to wind turbines and military weapons.

Bell Potter has a speculative buy rating and 72 cents price target on Arafura’s shares.

Readytech Holdings Ltd (ASX: RDY)

Another small-cap ASX share that could be a buy is Readytech. It is a leading provider of mission-critical software-as-a-service (SaaS) solutions for the education, workforce management, government and justice sectors. These are defensive markets, which bodes well for the company in the current tough economic environment.

It is for this reason that Goldman Sachs expects Readytech to “deliver mid-teens organic growth at an expanding profit margin through the cycle.” Goldman has a buy rating and a $4.40 price target on its shares.

Serko Ltd (ASX: SKO)

A final small-cap ASX share that could be worth considering is online travel booking and expense management provider, Serko. Its Zeno offering is a next generation travel management application, using intelligent technology, predictive workflows and a global travel marketplace to transform business travel across the entire journey. The company has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a high risk buy rating and a $4.35 price target on the company’s shares.