On July 2, Joe Amato, President and Chief Investment Officer at Neuberger Berman, joined ‘Squawk Box’ on CNBC to discuss the latest market trends. Amato believes that there’s better value in small-cap stocks in H2 2025. There was a market rotation on July 1, where there was an unwind from higher-multiple sectors, such as tech and AI, into lower-multiple sectors. Amato explained that H1 2025 started with a market broadening out, where value and non-US equities began performing well, putting pressure on large-cap tech. However, the market then bounced back due to resilient economic data, improved trade, and better earnings, leaving behind sectors like value and small caps. This rotation was now occurring again. Neuberger Berman’s view is that true value lies in rotating into value and small-cap stocks, both of which had underperformed in H1.
On balancing exposure to large-cap tech, which had performed strongly, with the desire to invest in undervalued sectors, especially given the S&P 500 being around 6200, Amato acknowledged that the large-cap market was discounting a lot of good news, making them more cautious there. Consequently, their firm was at target allocation for large-cap stocks but was overweight in small-cap and non-US equities. These areas have underperformed for several years and offer better value for H2.
That being said, we’re here with a list of the 11 most undervalued small-cap stocks to buy according to analysts.
A Traders Desk showing different stocks, with traders hands hovering above the screen.
Methodology
We sifted through the Finviz stock screener to compile a list of top stocks that had a forward P/E ratio under 20 and were trading between $300 million and $2 billion. We then selected the 11 stocks with an upside potential of over 25%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q1 2025, which was sourced from Insider Monkey’s database.
Note: All data was collected on July 8.
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).
11 Most Undervalued Small-Cap Stocks to Buy According to Analysts
11. Pacira BioSciences Inc. (NASDAQ:PCRX)
Forward P/E Ratio as of July 8: 8.02
Market Capitalization as of July 8: $1.07 billion
Number of Hedge Fund Holders: 27
Average Upside Potential as of July 8: 25.11%
Pacira BioSciences Inc. (NASDAQ:PCRX) is one of the most undervalued small-cap stocks to buy according to analysts. On June 11, Pacira BioSciences announced new long-term follow-up data from its Phase 1 clinical trial of PCRX-201 (enekinragene inzadenovec), which is an investigational gene therapy for osteoarthritis of the knee.
The results were presented at the 2025 European Alliance of Associations for Rheumatology/EULAR Congress in Barcelona, Spain, and showed that a single intra-articular injection of PCRX-201 was well tolerated and led to sustained improvements in pain, stiffness, and function for up to 156 weeks in patients with moderate-to-severe osteoarthritis of the knee.
PCRX-201 utilizes Pacira’s proprietary high-capacity adenovirus (HCAd) gene therapy vector platform. It works by locally injecting into the knee joint to boost cellular production of interleukin-1 receptor antagonist (IL-1Ra), thereby blocking interleukin-1 pathway activation to alleviate chronic inflammation, pain, and improve function.
Pacira BioSciences Inc. (NASDAQ:PCRX) develops, manufactures, markets, distribution, and sells non-opioid pain management and regenerative health solutions to healthcare practitioners in the US.
10. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD)
Forward P/E Ratio as of July 8: 11.99
Market Capitalization as of July 8: $765.53 million
Number of Hedge Fund Holders: 24
Average Upside Potential as of July 8: 28.66%
Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is one of the most undervalued small-cap stocks to buy according to analysts. On June 30, Great Lakes Dredge & Dock Corporation announced that it has received 4 new work awards.
One of the awarded projects includes the Woodside Louisiana LNG project, for which the amount was undisclosed. Dredging operations for the project are expected to begin in early 2026. Another one is the Galveston Entrance Channel & Houston Ship Channel from Bolivar to Redfish maintenance project in Texas, valued at $36.2 million. Work for this is anticipated to commence in Q3 and conclude in Q4.
The Mississippi River Hopper Dredge Contract No. 3 for rental in Louisiana is valued at $17.6 million and is anticipated to commence in Q3 and conclude in Q4 as well. The Charleston Entrance Channel maintenance project in South Carolina is valued at $10.8 million. Work on this contract began in May earlier this year.
Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) provides dredging services in the US.
9. ePlus Inc. (NASDAQ:PLUS)
Forward P/E Ratio as of July 8: 18.42
Market Capitalization as of July 8: $1.87 billion
Number of Hedge Fund Holders: 24
Average Upside Potential as of July 8: 30.74%
ePlus Inc. (NASDAQ:PLUS) is one of the most undervalued small-cap stocks to buy according to analysts. On July 8, ePlus announced that it has been recognized as Digital Realty’s 2024 Rising Star Partner of the Year.
The award acknowledges ePlus’s expertise in AI innovation. In November 2024, ePlus and Digital Realty collaborated to launch an AI Experience Center, which is located in Digital Realty’s Innovation Lab in Ashburn, VA. This center provides organizations the ability to explore AI technologies within data center facilities for AI-optimized infrastructure.
The companies can then demonstrate the full lifecycle of AI infrastructure deployment, monitoring, and management.
ePlus Inc. (NASDAQ:PLUS) provides IT solutions that enable organizations to optimize their IT environment and supply chain processes in the US and internationally.
8. International Money Express Inc. (NASDAQ:IMXI)
Forward P/E Ratio as of July 8: 5.38
Market Capitalization as of July 8: $313.26 million
Number of Hedge Fund Holders: 23
Average Upside Potential as of July 8: 43.54%
International Money Express Inc. (NASDAQ:IMXI) is one of the most undervalued small-cap stocks to buy according to analysts. On July 8, International Money Express (also called Intermex) announced the launch of its fully redesigned Remittance-as-a-Service (RaaS) platform.
The upgraded service enables businesses to integrate fast and secure cross-border money transfer capabilities directly into their own customer experiences. A growing number of companies are already using Intermex’s RaaS platform to generate new cross-border revenue streams.
Through this platform, businesses can offer their own branded person-to-person and business-to-person payment services to eligible markets. The RaaS platform offers a customizable system that allows businesses to create branded customer experiences across various channels, such as mobile apps and the web.
International Money Express Inc. (NASDAQ:IMXI) is an omnichannel money remittance services company in the US, Latin America, Mexico, Central and South America, the Caribbean, Africa, and Asia.
7. Harmony Biosciences Holdings Inc. (NASDAQ:HRMY)
Forward P/E Ratio as of July 8: 8.84
Market Capitalization as of July 8: $1.88 billion
Number of Hedge Fund Holders: 27
Average Upside Potential as of July 8: 49.62%
Harmony Biosciences Holdings Inc. (NASDAQ:HRMY) is one of the most undervalued small-cap stocks to buy according to analysts. On June 11, Harmony Biosciences Holdings presented promising preclinical pharmacological data for BP1.15205, which is an investigational orexin 2 receptor (OX2R) agonist, at the 39th Annual Meeting of the Associated Professional Sleep Societies/APSS “SLEEP” in Seattle.
The data showed significant wake-promoting and cataplexy-suppressing effects in a standard transgenic mouse model of narcolepsy type 1. Narcolepsy is a chronic neurological disease affecting ~170,000 Americans, primarily characterized by excessive daytime sleepiness/EDS and cataplexy, along with other manifestations of REM sleep dysregulation.
The disease is often caused by the loss of hypocretin/orexin, a neuropeptide crucial for sleep-wake stability. BP1.15205 features a new and unique chemical scaffold optimized for high potency, which showed statistically significant wake-promoting effects at very low oral doses in the transgenic mouse model. These findings support dosing flexibility to potentially treat all 3 central disorders of hypersomnolence at low doses, which could offer an optimized benefit-risk profile.
Harmony Biosciences Holdings Inc. (NASDAQ:HRMY) is a commercial-stage pharmaceutical company that develops & commercializes therapies for patients with rare & other neurological diseases in the US.
6. Diversified Energy Company (NASDAQ:DEC)
Forward P/E Ratio as of July 8: 3.76
Market Capitalization as of July 8: $724.30 million
Number of Hedge Fund Holders: 24
Average Upside Potential as of July 8: 60.84%
Diversified Energy Company (NASDAQ:DEC) is one of the most undervalued small-cap stocks to buy according to analysts. On June 24, Diversified Energy and global investment firm Carlyle announced a new partnership. The collaboration aims to invest up to $2 billion in existing proved developed producing/PDP natural gas and oil assets across the US.
PDP assets are oil & gas resources that are actively being extracted and sold, have existing infrastructure, and are economically viable under current conditions. The exclusive partnership combines Carlyle’s extensive credit and structuring expertise, primarily through its asset-backed finance/AB team, with Diversified’s operational capabilities and business model.
Carlyle intends to explore opportunities to securitize these assets. This securitization strategy unlocks long-term and resilient financing for this segment of the nation’s energy infrastructure by packaging these assets into tradable financial instruments.
Diversified Energy Company (NASDAQ:DEC) is an independent owner and operator of producing natural gas & oil wells primarily in the Appalachian Basin of the US.
5. Jamf Holding Corp. (NASDAQ:JAMF)
Forward P/E Ratio as of July 8: 10.16
Market Capitalization as of July 8: $1.20 billion
Number of Hedge Fund Holders: 27
Average Upside Potential as of July 8: 64.84%
Jamf Holding Corp. (NASDAQ:JAMF) is one of the most undervalued small-cap stocks to buy according to analysts. On June 5, Jamf showed its latest platform advancements, which included new AI-powered management features and enhanced security capabilities, during the US leg of its global customer event series, called Jamf Nation Live, held in Minneapolis.
Jamf’s AI Assistant now includes two new capabilities, which are currently available in beta for testing. The search skill allows IT administrators to perform natural language queries for inventory for faster identification of devices meeting specific criteria. The explain skill simplifies complex mobile device management configurations and policies by translating them into clear and understandable language.
Jamf also announced the general availability of Blueprints, which furthers its support for Apple’s Declarative Device Management/DDM framework, following an early preview at JNUC. Blueprints are designed to simplify device configuration by consolidating policies, profiles, and restrictions into a unified workflow across Apple fleets. Additionally, a beta release of Configuration Profiles within Blueprints uses a new dynamic framework to deliver all available MDM keys more efficiently.
Jamf Holding Corp. (NASDAQ:JAMF) provides management and security solutions for Apple platforms in the Americas, Europe, the Middle East, India, Africa, and the Asia Pacific.
4. Mativ Holdings Inc. (NYSE:MATV)
Forward P/E Ratio as of July 8: 13.26
Market Capitalization as of July 8: $405.92 million
Number of Hedge Fund Holders: 29
Average Upside Potential as of July 8: 74.97%
Mativ Holdings Inc. (NYSE:MATV) is one of the most undervalued small-cap stocks to buy according to analysts. As May came to an end, Mativ announced a significant milestone in its partnership with Miru Smart Technologies, which is a pioneer in smart window innovation.
Mativ, through its advanced polymer film solutions brand called Argotec, has secured its first commercial purchase order for materials used in Miru’s dynamic electrochromic window technology. This is a step in preparing the supply chain for the large-scale production and global adoption of electrochromic glass by automotive OEMs.
The order follows co-development and material testing between Mativ and Miru. An achievement was the successful fabrication of one of the world’s largest electrochromic sunroof devices.
Mativ Holdings Inc. (NYSE:MATV) manufactures and sells specialty materials in the US, Europe, the Asia Pacific, the Americas, and internationally.
3. Avadel Pharmaceuticals (NASDAQ:AVDL)
Forward P/E Ratio as of July 8: 15.34
Market Capitalization as of July 8: $875.89 million
Number of Hedge Fund Holders: 33
Average Upside Potential as of July 8: 77.69%
Avadel Pharmaceuticals (NASDAQ:AVDL) is one of the most undervalued small-cap stocks to buy according to analysts. On June 30, Avadel Pharmaceuticals announced that the US Court of Appeals for the District of Columbia Circuit (Appeals Court) unanimously affirmed a previous decision by the US District Court for the District of Columbia (District Court).
This ruling was in favor of the US FDA regarding its approval of LUMRYZ (sodium oxybate), which is a once-at-bedtime oxybate treatment for cataplexy or excessive daytime sleepiness/EDS in patients 7 years of age and older with narcolepsy. The lawsuit had been brought by Jazz Pharmaceuticals Inc. (NASDAQ:JAZZ).
The ruling confirms the FDA’s finding, which the Appeals Court noted was undisputed, that LUMRYZ’s once-at-bedtime dosing offers clinical superiority to all first-generation, immediate-release oxybates and represents a major contribution to patient care. Avadel Pharmaceuticals intends to continue advancing its commercial strategy to transform the sleep treatment paradigm for the narcolepsy community and increase the number of patients treated beyond the current thousands.
Avadel Pharmaceuticals (NASDAQ:AVDL) is a biopharmaceutical company in the US. Jazz Pharmaceuticals Inc. (NASDAQ:JAZZ) identifies, develops, and commercializes pharmaceutical products in the US, Europe, and internationally.
2. Select Medical Holdings Corporation (NYSE:SEM)
Forward P/E Ratio as of July 8: 13.59
Market Capitalization as of July 8: $1.91 billion
Number of Hedge Fund Holders: 23
Average Upside Potential as of July 8: 78.17%
Select Medical Holdings Corporation (NYSE:SEM) is one of the most undervalued small-cap stocks to buy according to analysts. On June 27, Select Medical Corporation announced a new agreement with Ballad Health to jointly operate Select Specialty Hospital – Tri-Cities, a critical illness recovery hospital located in Kingsport, Tennessee.
This facility, licensed as long-term acute care, will be a hospital-in-hospital situated within Ballad Health’s Indian Path Community Hospital. Under the agreement, Select Medical will hold a majority ownership and serve as the managing partner of the 46-bed joint venture hospital with Ballad Health.
The hospital is currently owned and operated solely by Select Medical and will relocate from its present location at Ballad Health’s Bristol Regional Medical Center to Indian Path Community Hospital. In addition to the soon-to-be-relocated Select Specialty Hospital – Tri-Cities, Select Medical operates 6 other critical illness recovery hospitals across Tennessee.
Select Medical Holdings Corporation (NYSE:SEM) operates critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the US.
1. ACCO Brands Corporation (NYSE:ACCO)
Forward P/E Ratio as of July 8: 4.45
Market Capitalization as of July 8: $350.49 million
Number of Hedge Fund Holders: 25
Average Upside Potential as of July 8: 182.78%
ACCO Brands Corporation (NYSE:ACCO) is one of the most undervalued small-cap stocks to buy according to analysts. On June 26, Quartet, which is an ACCO Brand with 60+ years of experience in premium glass dry-erase products, introduced 2 new products designed to enhance modern workspaces: the Quartet InvisaMount Anti-Glare Magnetic Glass Dry-Erase Board series and the Quartet Flip-Top Glass Desktop Dry-Erase Computer Pad.
The Anti-Glare InvisaMount Glass Dry-Erase Boards feature a new glass treatment that reduces reflections by up to 70% compared to standard glass dry-erase boards. They come with a 20-year limited warranty. For professionals seeking a clutter-free workspace, the new Quartet Flip-Top Glass Dry-Erase Desktop Computer Pad combines a durable, customizable writing surface with hidden storage compartments.
Both new products are GREENGUARD Gold Certified, which means that they meet rigorous third-party standards for low chemical emissions. Both products are available for purchase on Quartet.com and the Amazon Quartet storefront.
ACCO Brands Corporation (NYSE:ACCO) designs, manufactures, and markets consumer, school, technology, and office products in the US, Canada, Brazil, Mexico, Chile, Europe, the Middle East, Australia, New Zealand, and Asia.
While we acknowledge the potential of ACCO 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 ACCO and that has 100x upside potential, check out our report about this cheapest AI stock.
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