In this article, we will look at the 10 Best Small-Cap Value Stocks to Buy.
Small-cap stocks are the real thing in an equity market under immense pressure amid geopolitical and monetary policy uncertainties. In April alone, the stocks saw huge gains, with the Russell 2000 index jumping 12%, marking the best month since November 2020. Small-cap stocks outperformed large-cap stocks, advancing 10.4%.
Analysts at Bank of America expect the momentum around small-cap stocks to continue throughout the year amid renewed interest in risk-taking.
“Small caps have outperformed [year to date] and we expect them to continue to lead, driven by an EPS/manufacturing recovery,” wrote Bank of America analysts led by equity and quantitative strategist Jill Carey
Strategists at JPMorgan expect small-cap stocks to lead market gains amid the de-escalation of tensions in the Middle East, as investors grapple with uncertainty over prospects for a ceasefire. The strategists expect consumer discretionary industries such as homebuilders and retailers to outperform, closely followed by financials, on an improving macro backdrop.
On the other hand, Citigroup strategists expect a potential deal with Iran to be a positive for the US Materials stocks.
“Those parts of the market have lagged generally as they are negatively impacted by oil prices so we were looking for areas that we liked thematically going in,” according to Stuart Kaiser, head of US equity trading strategy.
While the year has been kind to small caps, it does not mean investors should go all in on one asset class. According to Gabriel Shahin, founder of Falcon Wealth Planning in Irvine, Calif., investors should allocate 5% to 10% of their portfolio to small-cap stocks.
With that in mind, let’s take a look at some of the best small-cap value stocks to buy.
Source: Pexels
Our Methodology
To compile a list of the best small-cap value stocks to buy, we used Finviz and Yahoo Screener to select stocks with a market cap of between $300 million and $2 Billion. From the list, we focused on stocks with a forward P/E of less than 15 and an upside potential of more than 20% (as of May 5). We also detailed the number of hedge funds holding stakes in the companies in Q4 2025. Finally, we ranked the stocks in ascending order based on their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best Small-Cap Value Stocks to Buy
10. Federal Agricultural Mortgage Corp (NYSE:AGM)
Forward P/E: 9.01
Market Cap: $1.80 Billion
Number of Hedge Fund Holders: 19
Stock Upside Potential: 23.03%
Federal Agricultural Mortgage Corp (NYSE:AGM) is one of the best small-cap value stocks to buy. On May 5, Federal Agricultural Mortgage Corp (NYSE:AGM) delivered record first-quarter results across the board, characterized by double-digit year-over-year growth in business volume, revenue, and core earnings.
Business volume rose 17% year over year to $34.8 billion, driven by strong execution and sustained customer demand. Net interest income grew 11% to $101.4 million, while net income attributable to shareholders was $51.8 million, or $4.75 per share.
Net portfolio grew by $1.5 billion, affirming strong customer demand across all business segments. The Total Farm & Ranch portfolio grew by $675.3 million, driven by higher net loan purchase volume.
According to chief executive officer Brad Nordholm, Federal Agricultural Mortgage will continue to offer vital liquidity to the agricultural and rural infrastructure sectors, supported by a diversified business model, a strong capital position, and disciplined risk management.
Federal Agricultural Mortgage Corp (NYSE:AGM) provides a secondary market for agricultural and rural utility loans, buying loans, providing liquidity, and guaranteeing securities backed by farm, ranch, and infrastructure loans.
9. Adient Plc (NYSE: ADNT)
Forward P/E: 9.51
Market Cap: $1.62 Billion
Number of Hedge Fund Holders: 32
Stock Upside Potential: 27.68%
Adient Plc (NYSE:ADNT) is one of the best small-cap value stocks to buy. On April 27, Adient Plc (NYSE:ADNT) expanded its footprint with the acquisition of a foam production plant in Romulus, MI. The acquisition strengthens the company’s footprint in the production of foam seats for various automaker customers.
The company acquired the plant from automotive supplier Woodbridge. The transaction includes the purchase of an existing building and land, production equipment, and associated assets. Romulus, MI, joins Adient with 10 foam plants in the Americas region. It also operates 30 foam manufacturing plants worldwide. The acquisition asserts the company’s strategic growth plan.
The acquisition comes on the heels of Adient advancing its mechanical massage portfolio with the commercialization of the ProForce Massage Flow solution. The new solution is designed to deliver expanded massage coverage, modular integration, and mass-produced, validated technologies. The massage flow solution is to expand the company’s seating comfort portfolio with a more dynamic, versatile massage experience.
Adient Plc (NYSE:ADNT) is a global leader in the design and manufacturing of automotive seating systems for all major automakers. It produces complete seats, frames, mechanisms, foam, and trim for passenger, commercial, and electric vehicles (EVs). Adient operates worldwide with roughly 200 manufacturing plants and 65,000+ employees.
8. Addus HomeCare Corporation (NASDAQ:ADUS)
Forward P/E: 14.56
Market Cap: $1.84 Billion
Number of Hedge Fund Holders: 20
Stock Upside Potential: 31.72%
Addus HomeCare Corporation (NASDAQ:ADUS) is one of the best small-cap value stocks to buy. On May 4, Addus HomeCare Corporation (NASDAQ:ADUS) delivered solid first-quarter 2026 results, benefiting from continued demand for home-based care services across the continuum.
The remarks come on the heels of the company delivering a 7.7% increase in net service revenues to $363.6 million. Net income in the quarter increased to $25.1 million, or $1.36 per share, from $21.2 million last year in the same quarter. Adjusted net income per diluted share increased 14.1% to $1.62 from $1.42 a share last year, in the same quarter.
The personal care business, which accounted for 77.3% of total revenues, drove first-quarter results with 6.5% organic revenue growth. Hospice care also showed strong growth, with a 7.7% organic revenue increase.
In addition, Addus Homecare has moved to expand its footprint through the acquisition of HomeCourt Home Care’s personal care operations, with annualized revenues of $9.7 million. It has also entered into an agreement to acquire additional Indiana operations to expand geographic reach.
Addus HomeCare Corporation (NASDAQ:ADUS) provides in-home care—personal care, home health, and hospice—to 62,000+ patients in 24 states, supporting the elderly and disabled with non-medical aid, skilled nursing, and care coordination.
7. Blackbaud Inc. (NASDAQ:BLKB)
Forward P/E: 7.24
Market Cap: $1.69 Billion
Number of Hedge Fund Holders: 32
Stock Upside Potential: 33.19%
Blackbaud Inc. (NASDAQ:BLKB) is one of the best small-cap value stocks to buy. On April 30, Evercore ISI reiterated an In Line rating on Blackbaud Inc. (NASDAQ:BLKB) and lowered the price target to $45 from $55.
The price target cut comes on the heels of Blackbaud delivering solid first-quarter results. Revenue in the quarter was up 4.2% year over year to $281.1 million, beating Evercore ISI’s estimate of $279.9 million. The increase was driven by a 5% organic recurring revenue increase. Adjusted operating margins improved 120 basis points to 29.6% due to cost discipline and productivity initiatives.
Net income in the quarter totaled $52.6 million or $1.14 a share, up by $0.19 a share. The better-than-expected results underscore the strength of the financial model that’s driving growth, expanding margins, and expanding free cash flow.
Management expects growth momentum to continue throughout the year, with full-year revenue expected to range between $1.173 billion and $1.179 billion, and non-GAAP diluted earnings per share between $5.15 and $5.25. Free cash flow is also expected to range between $280 million and $290 million.
Blackbaud Inc. (NASDAQ:BLKB) is a leading cloud software company focused exclusively on providing technology for the social good community, including nonprofits, foundations, educational institutions, and healthcare organizations. They provide solutions for fundraising, constituent relationship management (CRM), financial management, and analytics to over 40,000 customers in 100+ countries.
6. ZoomInfo Technologies Inc. (NASDAQ:GTM)
Forward P/E: 5.99
Market Cap: $1.96 Billion
Number of Hedge Fund Holders: 43
Stock Upside Potential: 36.67%
ZoomInfo Technologies Inc. (NASDAQ:GTM) is one of the best small-cap value stocks to buy. On April 20, analysts at Barclays reiterated an Equal Weight on Zoominfo Technologies Inc. (NASDAQ:GTM) and cut the price target to $8 from $9.
The price target cut came as the research firm adjusted its targets for software companies as part of its first-quarter earnings preview. Over the years, the first quarter has been the smallest quarter, and Barclays does not believe the negative sentiment around software improved this year.
However, the research firm maintained an Equal Weight rating on ZoomInfo Technologies on expectations of fundamental improvements in the second half of the year. On the other hand, analysts at Stifel also adjusted their price target for the stock to $12 from $14 while maintaining a Buy rating. The bullish stance is in response to the company’s solid forward guidance.
ZoomInfo Technologies Inc. (NASDAQ:GTM) offers a cloud-based Go-to-Market intelligence and engagement platform for sales, marketing, operations, and recruiting professionals. The company provides actionable business data and software to help businesses identify, connect with, and convert ideal customers.
While we acknowledge the potential of GTM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GTM and that has 100x upside potential, check out our report about the cheapest AI stock.
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