In this article, we discuss the 11 best micro-cap stocks to invest in according to analysts.
Micro-cap companies, generally referring to publicly traded businesses with less than $300 million in market capitalization, are among the most volatile and high-risk investments in the stock market. However, these risks can also be highly rewarding for investors who have the appetite to make such bets. One reason for the generally visible sharp volatility in these stocks is that interest in these firms is driven more by sentiment, speculative flows, or external catalysts than by fundamentals. As such, these stocks become fertile ground for outsized gains, while remaining fraught with downside risk.
A cautionary tale in this regard was published by the news platform Financial Times in August. According to the report, investors lost close to $4 billion in July this year as pump and dump schemes targeted Chinese micro-cap stocks that were listed on the U.S. stock exchanges. These schemes often involve the use of coordinated social media campaigns that inflate the share price of a stock before a dramatic collapse. However, despite the negative attention, micro-caps remain a viable investment option, especially in the context of capital allocation and investors diversifying away from the small group of firms dominating the benchmark S&P 500.
Our Methodology
For this article, we used online stock screeners to identify companies with a market capitalization below $300 million that have an analyst upside potential of more than 20% as of October 10. From this pool, we selected the top eleven stocks and ranked them in ascending order of their upside potential.
These stocks are also popular among hedge funds. 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Best Micro Cap Stocks to Invest in According to Analysts
11. Citi Trends, Inc. (NASDAQ:CTRN)
Number of Hedge Fund Holders: 22
Analyst Upside as of December 9: 20.94%
Market Capitalization: $290 Million
Citi Trends, Inc. (NASDAQ:CTRN) is one of the best micro-cap stocks to invest in.
On December 2, the company posted earnings for the third quarter, reporting a revenue of more than $197 million, up 10% compared to the revenue over the same period last year and beating market expectations by close to $10 million. In terms of guidance, the firm expects fourth-quarter comparable store sales to be up high single digits, and gross margin is expected to be in the range of 40% to 41%.
On December 3, DA Davidson analyst Michael Baker raised the price target on Citi Trends, Inc. (NASDAQ:CTRN) stock to $52 from $43 and kept a Buy rating on the shares. In an investor note, the analyst opined that there was a long way to go in this merchandise-driven turnaround since the company’s high single to low double digit comp momentum was continuing into the holidays. Baker further added that inventory was fresh, differentiated, and on-trend, and a high fixed cost structure meant above-average incremental margins.
Citi Trends, Inc. (NASDAQ:CTRN) operates as a value retailer of fashion apparel, accessories, and home goods.
10. 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)
Number of Hedge Fund Holders: 16
Analyst Upside as of December 9: 30%
Market Capitalization: $269 Million
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is one of the best micro-cap stocks to invest in.
Latest reports indicate that Alexander Zelikovsky is poised to take over as the Chief Information Officer at 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) and will report to CEO Adolfo Villagomez. In his CIO role, Zelikovsky will lead enterprise IT applications, data architecture, data management, cybersecurity, business intelligence, and support for AI and digital commerce initiatives.
In late October, 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) posted earnings for the first fiscal quarter, reporting losses per share of $0.83. The revenue over the period was more than $215 million, down close to 11% compared to the same period last year. Adolfo Villagomez, the CEO of the firm, has acknowledged in the past few months that the company has not lived up to expectations in recent years, but was using data to make smarter decisions while driving operational discipline, efficiency, and accountability to get back to growth.
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) provides gifts for various occasions in the United States and internationally.
9. KNOT Offshore Partners LP (NYSE:KNOP)
Number of Hedge Fund Holders: 6
Analyst Upside as of December 9: 41%
Market Capitalization: $280 Million
KNOT Offshore Partners LP (NYSE:KNOP) is one of the best micro-cap stocks to invest in.
On December 8, Alliance Global downgraded KNOT Offshore Partners LP (NYSE:KNOP) to Neutral from Buy. In an investor note, the analyst noted that there was limited upside potential in the shares following the buyout offer. However, per the analyst, the offer could move up into the $12 per unit range.
On December 5, the company posted earnings for the third quarter of 2025, reporting revenue of $96.9 million, operating income of $30.6 million, net income of $15.1 million, and adjusted EBITDA of $61.6 million. The company also outlined that 93% of vessel time in 2026 was covered by fixed contracts, rising to 98% if all options were exercised.
KNOT Offshore Partners LP (NYSE:KNOP) acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil.
8. Jade Biosciences, Inc. (NASDAQ:JBIO)
Number of Hedge Fund Holders: 12
Analyst Upside as of December 9: 63.2%
Market Capitalization: $296 Million
Jade Biosciences, Inc. (NASDAQ:JBIO) is one of the best micro-cap stocks to invest in.
On November 25, Clear Street analyst Kaveri Pohlman initiated coverage of Jade Biosciences, Inc. (NASDAQ:JBIO) stock with a Buy rating and $25 price target. In an investor note, the analyst underlined that there was conviction in JADE101, which was a potential best-in-class anti-APRIL mAb poised to reshape the IgAN therapeutic landscape. The analyst further added that Jade’s entry into the market was impeccably timed.
Latest reports indicate that the firm has entered into a private placement, resulting in gross proceeds of approximately $135 million. The net proceeds will be used for the PIPE financing, together with existing cash, cash equivalents, and marketable securities, to fund research and development, general corporate expenses, and working capital needs. The reports also contend that, based on current estimates, the cash, cash equivalents, and marketable securities will fund company operations into the first half of 2028.
Jade Biosciences, Inc. (NASDAQ:JBIO) operates as a biotechnology company that develops therapies for inflammation and immunology indications in patients living with autoimmune diseases.
7. Omeros Corporation (NASDAQ:OMER)
Number of Hedge Fund Holders: 14
Analyst Upside as of December 9: 74.3%
Market Capitalization: $285 Million
Omeros Corporation (NASDAQ:OMER) is one of the best micro-cap stocks to invest in.
Latest reports show that Omeros Corporation (NASDAQ:OMER) has closed a deal worth around $2.1 billion with drug giant Novo Nordisk for the zaltenibart, a phase 2 asset of the former, in development for rare blood and kidney disorders. Omeros is receiving $340 million in upfront and near-term milestone payments, up to $2.1 billion in milestone payments, plus tiered royalties on potential net sales.
Omeros Corporation (NASDAQ:OMER) continues to receive bullish reviews from analysts on Wall Street. HC Wainwright has a Buy rating on the shares with a price target of $9. The company’s lead product candidate is the Narsoplimab for the treatment of hematopoietic stem-cell transplant-associated thrombotic microangiopathy. It also develops OMS1029, which has completed phase I clinical trials for mannan-binding lectin-associated serine protease 2 and lectin pathway disorders.
Omeros Corporation (NASDAQ:OMER) is a clinical-stage biopharmaceutical company that discovers, develops, and commercializes small-molecule and protein therapeutics, and orphan indications targeting immunologic diseases.
6. Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL)
Number of Hedge Fund Holders: 13
Analyst Upside as of December 9: 75%
Market Capitalization: $297 Million
Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL) is among the best micro-cap stocks to invest in.
In earnings for the third quarter of 2025, Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL) posted earnings per share of $0.17, beating estimates by $0.14. The revenue over the period was in excess of $168 million, up 10.2% year-on-year and beating expectations by $9.35 million. The company also announced a quarterly dividend of $0.05 per share on November 7 and paid $3.2 million to shareholders through dividends in Q3.
In mid-September, the firm announced that Mark Filanowski would retire as the CEO and step down from the Board of Directors early next year, following eleven years with the company. Mads Petersen, the COO of the firm, has been appointed to succeed Filanowski. Petersen joined the company in 2009 when he established Nordic Bulk Carriers in partnership with Pangaea. He has overseen Pangaea’s commercial, operational, and technical functions since 2022.
Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL) provides seaborne dry bulk logistics and transportation services to industrial customers worldwide.
5. Arq, Inc. (NASDAQ:ARQ)
Number of Hedge Fund Holders: 14
Analyst Upside as of December 9: 119.5%
Market Capitalization: $221 Million
Arq, Inc. (NASDAQ:ARQ) is one of the best micro-cap stocks to invest in.
In late November, Clear Street lowered the price target on Arq, Inc. (NASDAQ:ARQ) to $8 from $9 and kept a Buy rating on the shares. In an investor note, the analyst noted that Arq now expects its new Granular Activated Carbon production line issues to persist until mid-2026, prompting a slower modeled ramp to 95%+ utilization and a delay in adding a second line, which reduces the 2027 revenue forecasts.
On November 6, the company posted earnings for the third quarter of 2025, reporting losses per share of $0.02, missing estimates by $0.04. The revenue over the period was $35 million, up slightly compared to the revenue over the same period last year but missing expectations by $0.6 million.
Arq, Inc. (NASDAQ:ARQ) is an environmental technology company that engages in the sale of consumable air, water, and soil treatment solutions based on activated carbon in the United States and Canada.
4. Voyager Therapeutics, Inc. (NASDAQ:VYGR)
Number of Hedge Fund Holders: 15
Analyst Upside as of December 9: 227.1%
Market Capitalization: $277 Million
Voyager Therapeutics, Inc. (NASDAQ:VYGR) is one of the best micro-cap stocks to invest in.
On November 12, HC Wainwright lowered the price target on Voyager Therapeutics, Inc. (NASDAQ:VYGR) to $25 from $30 and kept a Buy rating on the shares. Per the analyst, Voyager reported strong Q3 results, ending the quarter with $229M in cash and operational runway into 2028, while remaining eligible for up to $2.4B in partner milestones.
Voyager Therapeutics, Inc. (NASDAQ:VYGR) recently presented at the Biopharma Back to School Conference organized by investment firm Citi, providing important updates to drugs under development. In earnings for the third quarter of 2025, released in early November, the firm reported losses per share of $0.47, beating analyst expectations by $0.05. The revenue over the period was in excess of $13 million, down close to 45% compared to the revenue over the same period last year and beating market estimates by $5.5 million.
Voyager Therapeutics, Inc. (NASDAQ:VYGR) is a biotechnology company that focuses on human genetics for the cure of neurological diseases.
3. Tectonic Therapeutic, Inc. (NASDAQ:TECX)
Number of Hedge Fund Holders: 24
Analyst Upside as of December 9: 331.3%
Market Capitalization: $299 Million
Tectonic Therapeutic, Inc. (NASDAQ:TECX) is one of the best micro-cap stocks to invest in.
On November 18, LifeSci Capital reiterated a Buy rating on Tectonic Therapeutic, Inc. (NASDAQ:TECX) stock with a price target of $88. Tectonic Therapeutic, Inc. (NASDAQ:TECX) is a biotechnology company that focuses on the discovery and development of therapeutic proteins and antibodies to modulate the activity of G protein-coupled receptors.
Tectonic Therapeutic, Inc. (NASDAQ:TECX) develops the GEODe technology platform to enable the discovery and development of GPCR-targeted biologic medicines. One of the lead product candidates of the firm is TX45, a Fc-relaxin fusion molecule that activates the RXFP1 receptor, the GPCR target of the hormone, and relaxin. It is also developing TX2100 for the treatment of hereditary hemorrhagic telangiectasia, a GPCR modulator bispecific for treating fibrosis, and other GPCR modulators.
2. Humacyte, Inc. (NASDAQ:HUMA)
Number of Hedge Fund Holders: 10
Analyst Upside as of December 9: 378.05%
Market Capitalization: $247 Million
Humacyte, Inc. (NASDAQ:HUMA) is one of the best micro-cap stocks to invest in.
In mid-November, Benchmark analyst Bruce Jackson maintained a Buy rating on Humacyte, Inc. (NASDAQ:HUMA) stock and set a price target of $11. Humacyte, Inc. (NASDAQ:HUMA) engages in the development and manufacture of off-the-shelf, implantable, and bioengineered human tissues for the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas.
Humacyte, Inc. (NASDAQ:HUMA) recently announced that it had entered into a securities purchase agreement with certain fundamental institutional investors to purchase approximately $60 million worth of its common stock and warrants in an oversubscribed registered direct offering. The warrants will become exercisable 180 days following the date of issuance and have an exercise price of $2.11 per share.
1. Immutep Limited (NASDAQ:IMMP)
Number of Hedge Fund Holders: 2
Analyst Upside as of December 9: 488.2%
Market Capitalization: $295 Million
Immutep Limited (NASDAQ:IMMP) is one of the best micro-cap stocks to invest in.
In mid-November, Immutep Limited (NASDAQ:IMMP) reported positive data from two clinical trials of its drug candidate eftilagimod alpha, or efti. The firm revealed that a Phase 2 study of efti in combination with radiotherapy and Merck’s Keytruda showed significant efficacy in treating patients with soft tissue sarcoma in the neoadjuvant setting. The biotech company also reported a 24-month overall survival rate of 81% from a Phase 1 study of efti in combination with Keytruda and chemotherapy as a first-line treatment for metastatic non-squamous non-small cell lung cancer.
The firm recently announced that a Phase III trial for a drug as first-line treatment for advanced or metastatic non-small cell lung cancer had enrolled and randomised over 170 patients, reaching an important milestone, as this is above the amount necessary to conduct the futility analysis. Marc Voigt, the CEO of Immutep Limited (NASDAQ:IMMP), has said that his firm is pleased with the pace of enrolment in the trial and believes it has the potential to change the treatment landscape in non-small cell lung cancer.
Immutep Limited (NASDAQ:IMMP) is a biotechnology company that engages in developing novel Lymphocyte Activation Gene-3-related immunotherapies for cancer and autoimmune diseases in Australia.
While we acknowledge the potential of IMMP as an investment, 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 IMMP and that has 100x upside potential, check out our report about this cheapest AI stock.
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