In this article, we will take a look at some of the best small company stocks to invest in.
Most of the time, a company is overlooked because of its mere capitalization. However, such enterprises are similar to a seed that is small in size but can turn into a big tree, only under the right environment. Not weighed down by fame or fortune, but by a quick and focused breakthrough moment, these stocks are creative yet underestimated.
In simple language, small company stocks, also known as small-cap stocks, are shares of smaller-sized publicly traded companies usually with a market capitalization between $300 million and $2 billion. The common features of these stocks include, but are not limited to, high growth potential, away from the investor eye, innovation, and volatility. But it takes a skilled investor to spot the hidden gem.
As the analysts at Research Affiliates highlight,
“With asset owners now exploring various avenues to diversify their equity allocations, small-cap stocks have emerged as more than just a diversification tool – they represent a compelling investment opportunity.”
A closeup of investor hands holding a small-cap investment security.
Our Methodology
We have scanned a list of 10 best small-cap stocks to invest in using Finviz screener while filtering for market capitalization between $300 million and $2 billion. These stocks have upside potential and are among analysts’ favorites. These are then ranked according to the upside potential, determined via the one-year price targets by analysts at Yahoo Finance, in an ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. SmartStop Self Storage REIT, Inc. (NYSE:SMA)
Market Capitalization: $1.13 billion
Upside potential as of June 18, 2025: 9.81%
On Wednesday, analysts at Raymond James raised the price target for SmartStop Self Storage REIT, Inc. (NYSE:SMA) to $44.00, up from $42.00, while upgrading to Strong Buy from Outperform. This confidence is driven by the company’s high-quality portfolio and operating platform.
Over the last few months, SmartStop Self Storage REIT, Inc. (NYSE:SMA) has returned quite impressive returns. While the market’s year-to-date return stands at merely 1.72%, the company reported an impressive 9.24%. This shows that the giant is just getting started.
From higher organic growth potential and margin upside to external growth impact because of its smaller size, the firm highlighted various reasons for a turnaround. The company has witnessed a revenue growth of 5.34% in the last twelve months, and with analysts anticipating 9% growth for the current fiscal year, SMA seems to be a hidden gem.
SmartStop Self Storage REIT, Inc. (NYSE:SMA) is a California-based company that owns and operates self-storage facilities in the United States and Canada. This self-managed REIT has a fully integrated operations team of around 590 self-storage professionals. With 220 operating properties in 23 states, the company is committed to delivering value to its investors and customers.
9. Array Technologies, Inc. (NASDAQ:ARRY)
Market Capitalization: $1.14 billion
Upside potential as of June 18, 2025: 19.81%
Oppenheimer, a leading global financial institution, reaffirmed its Outperform rating on Array Technologies, Inc. (NASDAQ:ARRY) with a price target of $13.00, citing the company’s latest APA Solar acquisition.
The announcement came as investors pursue exposure to utility-scale solar activity, a sector poised to grow following the Senate’s budget news on Monday. This racking and pilings company is set to be acquired at a valuation of 7.6x trailing twelve-month EBITDA, excluding 45X tax credits, allowing Array Technologies, Inc. (NASDAQ:ARRY) to expand its geographic footprint, mainly in colder and rockier regions where APA Solar is well-positioned.
Additionally, the agreement will also bring fixed tilt solutions to the company’s offerings, establishing Array Technologies, Inc. (NASDAQ:ARRY) as a full-spectrum provider of ground mount infrastructure solutions for solar developers. What’s truly exciting is that the company expects to realize at least $31 million in tax savings, with additional synergies across both the supply chain and sales operations.
Array Technologies, Inc. (NASDAQ:ARRY) is a New Mexico-based provider of solar tracking technology products with two main segments: Array Legacy Operations and STI Operations. Incorporated in 1987, the company’s core offerings include DuraTrack HZ v3, Array STI H250, Array OmniTrack, Array SkyLink, and SmarTrack.
8. Whitestone REIT (NYSE:WSR)
Market Capitalization: $643.805 million
Upside potential as of June 18, 2025: 20.66%
JMP Securities reaffirmed its Market Outperform rating on Whitestone REIT (NYSE:WSR) with an unchanged price target of $16.00, citing the latest Texas acquisition.
Earlier on Tuesday, Whitestone REIT (NYSE:WSR) disclosed plans to purchase a Fort Worth, Texas-based, 86,907 sq. ft. shopping center, marking the retail REIT’s 29th asset in Texas and 10th in the Dallas-Fort Worth metroplex.
The research firm noted that this property purchase reinforces the company’s position in a market with favorable operating fundamentals. While perfectly in sync with the giant’s strategies to target properties that entail notable retailers, sustained rental incomes, and mark-to-market upside, the acquisition adds to the company’s existing portfolio of 56 properties across Texas and Arizona.
In addition to this aspect, JMP Securities highlighted that Whitestone REIT (NYSE:WSR) has consistently delivered outperforming operating growth from its properties. What truly sets the company apart is its deployment strategy, which emphasizes target markets and improved portfolio quality.
Whitestone REIT (NYSE:WSR), headquartered in Houston, Texas, is a real estate investment trust (REIT) that acquires and operates open-air retail centers in the world’s ever-evolving markets, such as Phoenix, Austin, and Dallas-Fort Worth. Incorporated in 1998, the company aims to enhance property value and thus deliver stable returns to shareholders.
7. Enterprise Financial Services Corp (NASDAQ:EFSC)
Market Capitalization: $1.948 billion
Upside potential as of June 18, 2025: 23.23%
Analysts at DA Davidson reiterated their Buy rating on Enterprise Financial Services Corp (NASDAQ:EFSC) with an unchanged price target of $65.00, signaling a surge of 23.23% from the current price. This optimism stems from the firm’s recent follow-up with the bank regarding updates on its pending branch acquisition, loan growth, net interest margin, and credit quality.
DA Davidson highlights that short-term noise, such as the company’s asset sensitivity, pending branch acquisition, and isolated credit issues, overshadow its “strong organic momentum.” As the firm states, these distractions may have contributed to what it considers an “attractive trading discount” in contrast to its competitors.
The proposed price target demonstrates 11.8 times the giant’s EPS projections and 1.4 times the forecasted tangible book value by the end of 2026. Having said that, the firm has complete faith in the long-term value of Enterprise Financial Services Corp (NASDAQ:EFSC).
Enterprise Financial Services Corp (NASDAQ:EFSC) is a Missouri-based financial holding company that offers banking and wealth management services to both individuals and corporate customers. Incorporated in 1988, the company aims to deliver a lifetime of financial success.
6. Harmonic Inc. (NASDAQ:HLIT)
Market Capitalization: $1 billion
Upside potential as of June 18, 2025: 30.85%
Rosenblatt Securities, a leading boutique tech research firm, reaffirmed its Buy rating on Harmonic Inc. (NASDAQ:HLIT) and a price target of $11.00, based on the investor meeting discussions in the past week.
The meeting featured Nimrod Ben Natan, the CEO of Harmonic Inc. (NASDAQ:HLIT), Walter Jankovic, the CFO, and members from the research firm. The management expressed confidence, citing that the company is just getting started on a multi-year journey to power the future of broadband.
Although Harmonic Inc. (NASDAQ:HLIT) faces ongoing underwhelming rollouts by its largest customers, the issues seem temporary. Analysts anticipate better performance by the company during the second half of the current year, with accelerated growth in the upcoming year as the company takes measures to resolve customer deployment concerns.
Overall, the giant exhibits strong revenue growth and market penetration, stemming from innovation and strategic initiatives. One such initiative is the recently disclosed collaboration with CUJO AI to enhance broadband connectivity, particularly for latency-sensitive applications such as online gaming and video conferencing.
Harmonic Inc. (NASDAQ:HLIT) is a California-based provider of broadband access solutions across the globe. Founded in 1988, the company operates through two main segments: Broadband and Video. It also offers technical support and professional services, along with SaaS-related support and deployment.
5. Mayville Engineering Company, Inc. (NYSE:MEC)
Market Capitalization: $329.934 million
Upside potential as of June 18, 2025: 34.92%
On Tuesday, analysts at DA Davidson began coverage of Mayville Engineering Company, Inc. (NYSE:MEC) with a Buy rating and a price target of $23.00, reflecting a potential upside of over 50% from the current levels. This optimism is attributed to the company’s strong footing in the fabricating truck and machinery components market.
As the financial services firm highlighted, Mayville Engineering Company, Inc. (NYSE:MEC) has positioned itself as the “clear leader in its industry.” From the latest acquisitions to the implementation of an updated business model, this small-cap company is clearly winning over investor confidence.
Just recently, Mayville Engineering Company, Inc. (NYSE:MEC) announced the acquisition of Accu-Fab from Tide Rock Holdings worth $140.5 million. While the transaction will be completed during the third quarter, Mayville Engineering has already begun to diversify its portfolio and enter high-growth end markets.
Mayville Engineering Company, Inc. (NYSE:MEC) is a Wisconsin-based manufacturing partner providing a range of services, including designing, developing, and assembling. The company provides engineered components to original equipment manufacturers. Founded in 1945, the giant serves a diverse end market, mainly duty commercial vehicles, agriculture, power sports, and military.
4. LendingClub Corporation (NYSE:LC)
Market Capitalization: $1.296 billion
Upside potential as of June 18, 2025: 35.14%
LendingClub Corporation (NYSE:LC) introduced LevelUp Checking, a new digital checking account that provides cash back on debit card purchases and personal loan repayments through its LendingClub Bank business.
As part of its conditions, the account will offer 1% cash back on debit card purchases for mainly gas, groceries, and pharmacy products once its clients activate direct deposits. But it’s more exciting for customers having a LendingClub Corporation (NYSE:LC) personal loan, as they can enjoy 2% cash back on their timely monthly loan payments using their LevelUp Checking account.
As the Chief Customer Officer of LendingClub Corporation (NYSE:LC) stated,
“LevelUp Checking delivers cash back for essential purchases like gas and groceries while stacking on additional cash back for our borrowers who make on-time payments.”
LendingClub Corporation (NYSE:LC) delivered around a 42% return in one year. While this may not be truly impressive, the recent insider buying can’t be overlooked. During the five years of share price growth, the company has transitioned from loss to profitability. It’s clear that the management’s strategic vision will bring growth well into the future.
LendingClub Corporation (NYSE:LC) is a California-based bank holding company that provides a variety of financial products and services in the United States. The core offerings of the company include deposit and loan products, as well as a lending marketplace platform. Incorporated in 2006, the small-cap company is focused on offering members better borrowing rates and higher savings yields.
3. EZCORP, Inc. (NASDAQ:EZPW)
Market Capitalization: $811.591 million
Upside potential as of June 18, 2025: 56.27%
EZCORP, Inc. (EZPW), with a market capitalization of $811.591 million, has announced the acquisition of 40 pawn stores across 13 Mexican states in a press release. This attempt to expand its global footprint positions the company well in the auto pawn segment, which is considered one of the fastest-growing sectors in Mexico’s pawn industry.
The purchased stores, functioning under the Monte Providencia and Tu Empeño Efectivo brands, provide conventional pawn loans and auto pawn transactions. EZCORP, Inc. (NASDAQ:EZPW) assumed control of the management of seven additional Monte Providencia stores, with the anticipated completion of the purchase in the months ahead.
One of the company’s standout strengths is its robust liquidity position, which has current assets exceeding short-term liabilities by a factor of four. This allows the giant to engage in more strategic transactions. Just recently, EZCORP, Inc. (NASDAQ:EZPW) declared investments worth SEK 95 billion in Swedish AI infrastructure, marking it one of the largest AI investments by the alternative asset manager in Europe.
EZCORP, Inc. (NASDAQ:EZPW) is a Texas-based provider of pawn services in the United States and Latin America. With three main segments: U.S. Pawn, Latin America Pawn, and Other Investments, the company offers pawn loans and retails merchandise. Incorporated in 1989, the small-cap company is the go-to choice for short-term cash needs and quality pre-owned goods.
2. BitFuFu Inc. (NASDAQ:FUFU)
Market Capitalization: $518.843 million
Upside potential as of June 18, 2025: 171.46%
On Wednesday, Northland initiated coverage on BitFuFu Inc. (NASDAQ:FUFU) with a Market Perform rating and a price target of $5.50, implying an upside of 72.69%. According to the firm, the company’s cloud mining solutions assist in eliminating the common barriers associated with cryptocurrency mining, especially high initial costs and technical challenges.
BitFuFu Inc. (NASDAQ:FUFU) recently secured initial funding from Bitmain, a prominent player in the cryptocurrency mining hardware business. As long as the company effectively maintains the strategic partnership with Bitmain, particularly in the cloud mining segment, we have good reason to believe that FUFU will be driven beyond its current market average multiple.
The cloud mining business is a growth catalyst for BitFuFu Inc. (NASDAQ:FUFU), with registered users nearly doubling YoY to over 607,000, pointing towards growing retail demand. This rise was reported at a time when the total hash rate and power capacity steeply declined. Despite the infrastructure lag, the company posted impressive results that speak volumes about the small-cap company’s business model and market position.
BitFuFu Inc. (NASDAQ:FUFU) is a Singapore-based provider of digital asset mining solutions in Singapore, North America, Asia, and Europe. The company’s core offerings include cloud-mining services and miner hosting services for both individual and institutional digital asset enthusiasts. Incorporated in 2020, the company aims to make Bitcoin accessible to all.
1. Dianthus Therapeutics, Inc. (NASDAQ:DNTH)
Market Capitalization: $572.126 million
Upside potential as of June 18, 2025: 188.91%
Stifel reaffirmed a Buy rating on Dianthus Therapeutics, Inc. (NASDAQ:DNTH) while maintaining a price target of $52.00, citing the strength of the company in keeping more cash than debt. This impressive upside of 186.3%, from the current price of $18.02, shows that the giant is heading north as it develops lead drug candidate DNTH103.
The discussion revolved around the design of DNTH103 and its anticipated Phase 2 trial results for myasthenia gravis (MG), which is expected in September 2025. The management believes the success of DNTH103, relative to C5 inhibitors in the MG trial, would translate to the success of Dianthus Therapeutics, Inc. (NASDAQ:DNTH), driven by the drug’s improved safety profile and straightforward dosing schedule through a biweekly autoinjector.
Big changes are expected in the near future. The company is working to test DNTH103 in chronic inflammatory demyelinating polyneuropathy (CIDP), with interim results forecasted for the second quarter of 2026. If the MG trial goes well, this study will clear the path for a follow-up Biologics License Application.
Dianthus Therapeutics, Inc. (NASDAQ:DNTH), founded in 2019, is a New York-based clinical-stage biotechnology company that develops complement therapeutics for patients living with autoimmune and inflammatory diseases. With a commitment to leverage selectivity in its treatments, the company is conducting clinical trials with DNTH103 in several indications.
While we acknowledge the potential of DNTH 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 DNTH and that has 100x upside potential, check out our report about this cheapest AI stock.
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