For investors eyeing small-cap stocks with significant growth potential, three ASX-listed companies have been highlighted as strong candidates for substantial returns in FY 2025. These companies were showcased at the Pinnacle Investment Management Group Ltd (ASX: PNI) 2024 Investment Summit, where they caught the attention of leading fund managers. Here's a closer look at these promising ASX small-cap stocks and the reasons behind their potential.
Gentrack Group Ltd (ASX: GTK)
Gentrack Group Ltd is a key player in the energy sector, providing customer billing software to energy utility companies. The company's modern and flexible technology positions it well to benefit from the ongoing global energy transition. With the increasing complexity in energy distribution—driven by renewable sources like wind and solar, battery storage, and bidirectional energy flows—Gentrack's innovative solutions are expected to capture significant market share from established competitors such as SAP and Oracle (NYSE:ORCL).
Gentrack's share price has surged by 132% over the past year, reflecting strong market confidence. As the energy sector continues to evolve, Gentrack's technology could become increasingly integral to energy companies managing their operations and customer interactions. The company's performance suggests it could potentially become as prominent as other notable tech firms in the sector.
RPM Global Holdings Ltd (ASX: RUL)
RPM Global Holdings Ltd is a mining services company known for developing software solutions used by major mining operations, including BHP Group Ltd (ASX: ASX:BHP), Rio Tinto Ltd (ASX: ASX:RIO), and Newmont Corp (ASX: NEM). Over the past 20 years, RPM Global has invested approximately $200 million in research and development to enhance its software offerings.
Currently, RPM Global is experiencing notable growth in its annual recurring revenue, driven by its extensive client base and multiple software modules. The company's growth trajectory is underpinned by the fact that only 25% of Tier 1 miners are currently RPM Global customers. With a strategy focused on expanding its market share and offering additional modules, RPM Global is well-positioned for continued growth. The company's share price has increased by 58% in the past year, reflecting investor optimism about its future prospects.
NZME Ltd (ASX: NZM)
NZME Ltd operates across three business segments, with significant attention focused on its property portal, One Roof. Spheria Asset Management co-founder Matthew Booker highlighted One Roof's potential, drawing parallels to the early days of Domain in Australia. Despite NZME's diversified operations, the property portal is seen as a key growth driver.
The New Zealand property market has been relatively slow to transition to digital platforms. However, with One Roof being the second-largest property portal in New Zealand, it has the potential to capture significant market share as digital adoption increases. NZME's current market valuation of around NZ$190 million presents an attractive opportunity for growth, particularly if One Roof can achieve similar success to Domain in Australia. Despite a 1% decline in NZME's share price over the past year, the company's property portal offers promising growth potential.
These ASX small-cap stocks—Gentrack Group Ltd, RPM Global Holdings Ltd, and NZME Ltd—have been identified as potential high-growth opportunities for FY 2025 and beyond. Each company operates in a niche market with unique growth drivers, making them compelling choices for investors looking to diversify their portfolios with promising small-cap stocks. As always, it's essential to consider individual investment goals and conduct thorough research before making any investment decisions.