In this article, we will be taking a look at the 12 Most Promising Small-Cap Stocks According to Wall Street Analysts.
Small-cap stocks are drawing renewed investor attention in 2026 as capital rotates away from years of concentration in mega-cap names. In its Investment Outlook 2026, Goldman Sachs Asset Management said, “Further down the market capitalization spectrum, in the small and mid-cap space, we see potential opportunities among enablers, so-called ‘picks and shovels’ of the AI boom,” signaling that structural AI exposure may increasingly sit outside the largest companies, particularly among ecosystem suppliers.
The firm also emphasized the rate backdrop, stating, “Easing cycles also represent a potential tailwind for rate-sensitive asset classes, like small-cap stocks.” It added, “We also believe small caps in the US and internationally offer compelling opportunities driven by anticipated rate cuts and accelerating earnings,” underscoring that the opportunity is not just valuation-driven but tied to earnings momentum and macro relief converging simultaneously.
On February 19, Ben Snider, Goldman Sachs chief U.S. equity strategist, told CNBC’s “Money Movers” that economic data and fiscal Q4 earnings have been solid, but AI uncertainty has weighed on large parts of the S&P 500. Despite broad market strength, the index is roughly flat year to date, reflecting a shift in the AI narrative from pure optimism to a balance between optimism and disruption.
Snider noted that while tech’s heavy weighting has powered the index in recent years, it is now acting as a drag. The equal-weight S&P 500 is up about 5% to 6%, with roughly 350 of 500 stocks positive year to date, indicating underlying breadth even as large-cap tech becomes a headwind in aggregate.
With that said, let’s now look at the most promising stocks.
Our Methodology
For our methodology, we used screeners to identify stocks with small market caps and an average upside potential of at least 20% and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite 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).
Here is our list of the 12 most promising small-cap stocks according to Wall Street analysts.
12. CeriBell, Inc. (NASDAQ:CBLL)
CeriBell, Inc. (NASDAQ:CBLL) secures the twelfth place on our list of most promising stocks.
TheFly reported on February 25 that Canaccord reduced its price target for CBLL from $30 to $28 and maintained a Buy rating on the stock. The firm pointed to a strong fourth-quarter earnings beat for the company and noted that management issued cautious guidance despite several upcoming growth drivers.
CeriBell, Inc. (NASDAQ:CBLL) presented results for the fourth quarter and the entire year of 2025 earlier on February 24. The company reported its fourth-quarter sales of $24.8 million, which is up 34% from the previous year. The company said that this growth was fueled by an increase in both new and existing accounts. Subscription sales rose 37% to $6.0 million, while product revenue increased 33% to $18.8 million. The quarter ended with a gross profit of $21.6 million and a gross margin of 87%. At $0.36 per share, the corporation reported a net loss of $13.5 million.
The company’s total income for the year was $89.1 million, up 36% from 2024. This amount included $21.7 million from subscriptions and $67.3 million from products. 88% was the full-year gross margin. With 647 active accounts and $159.3 million in cash, cash equivalents, and marketable securities at the end of 2025, CeriBell, Inc. (NASDAQ:CBLL). A number of FDA clearances were also obtained by the company, which anticipates $111 million to $115 million in sales in 2026.
CeriBell, Inc. (NASDAQ:CBLL) is a medical technology company focused on rapid EEG solutions for neurological care. Its portable brain-monitoring systems use AI-powered analytics to help hospitals quickly detect seizures and improve timely diagnosis and treatment in critical care settings.
11. HealthStream, Inc. (NASDAQ:HSTM)
HealthStream, Inc. (NASDAQ:HSTM) is next on our list of most promising stocks.
TheFly reported on February 25 that Canaccord reduced its price target for HSTM from $25 to $21 and maintained a Hold rating. According to the firm, despite mounting investor fears about AI impacting SaaS firms, the company’s fourth-quarter 2025 performance was excellent. Management discussed these issues and made the case that HSTM is in a better position than many other software businesses to handle the pressures posed by AI during the results call.
On February 23, HealthStream, Inc. (NASDAQ:HSTM) announced its results for the fourth quarter and the entire year 2025. According to the company, its Q4 revenue hit a record $79.7 million, up 7.4% over the previous year. According to the report, operational income and net income, which came to $2.4 million and $2.5 million, respectively, were impacted by a $3.8 million stock-based compensation charge associated with a CEO share contribution. Non-GAAP operating income surged 31.7% to $6.2 million, and non-GAAP EPS rose to $0.18 once this effect was eliminated. Adjusted EBITDA rose by 16.4% to $18.8 million.
In addition, for the full year, the corporation reported that its revenue reached $304.1 million, which is up 4.3%, while adjusted EBITDA grew 7.5% to $71.8 million. The company also completed two acquisitions, repurchased $10 million in shares, and increased its quarterly dividend to $0.035 per share.
HealthStream, Inc. (NASDAQ:HSTM) is a healthcare workforce solutions company providing training, credentialing, and compliance software for hospitals and healthcare organizations. Its cloud-based platforms help improve staff competency, regulatory adherence, and overall patient care quality.
10. Orthofix Medical Inc. (NASDAQ:OFIX)
Orthofix Medical Inc. (NASDAQ:OFIX) is given the tenth position on our list of small-cap stocks.
TheFly reported on February 26 that Canaccord reduced its price target for OFIX from $24 to $20 and gave it a Buy rating. The modification comes after the company updated its financial model to reflect the fourth-quarter performance and its outlook for 2026.
On February 24, Orthofix Medical Inc. (NASDAQ:OFIX) published its 2026 outlook. The company projects adjusted EBITDA to be between $95 million and $98 million, and it expects positive free cash flow for the whole year. This does not include any potential outcomes of a court settlement. The management has said that increasing commercial execution, increasing market penetration, and promoting broader use of enabling technologies such as 7D FLASH Navigation are priorities for 2026.
The company expects full-year revenue contributions from the TRUELOK Elevate System and the FITBONE Bone Transport and Trochanteric Lengthening Nails, in addition to the scheduled full launch of VIRATA in the second part of the year. Simplifying the Spine commercial channel, expanding the Biologics offering, and maintaining development throughout Limb Reconstruction and BGT operations are other areas of concentration. According to the leadership, these programs should assist in maintaining consistent revenue growth, enhancing margins, and boosting cash flow in 2026.
Orthofix Medical Inc. (NASDAQ:OFIX) is a global medical device company focused on spine and orthopedic solutions. It develops and markets implants, biologics, and bone growth therapies to support musculoskeletal healing and improve patient mobility and recovery outcomes.
9. Ziff Davis, Inc. (NASDAQ:ZD)
The ninth stock on this list of most promising stocks is Ziff Davis, Inc. (NASDAQ:ZD)
TheFly reported on February 26 that Citigroup maintained a Neutral rating on ZD but lowered the price target to $29 from $35.
On February 23, Ziff Davis, Inc. (NASDAQ:ZD) released its financial results for the fourth quarter and the full year 2025. The company reported a small decline in revenues to $406.7 million in Q4, despite a 9.6% gain in operating income to $86.0 million. Net income fell to $0.4 million due to a $19.7 million loss on an equity-method investment and a $58.0 million pre-tax loss on a business transaction.
The company also disclosed that adjusted net income fell to $100.5 million, adjusted diluted EPS to $2.56, and adjusted EBITDA to $163.2 million. Operating cash flow increased to $191.1 million, while free cash flow increased to $157.8 million. Operating income rose 61.1% to $183.1 million, while revenues climbed 3.5% to $1.45 billion for the year.
Moreover, the firm’s net income declined to $47.4 million, adjusted net income decreased to $272.5 million, and adjusted diluted EPS rose slightly to $6.63. Free cash flow totaled $287.9 million, with significant share repurchases executed during the year.
Ziff Davis, Inc. (NASDAQ:ZD) is a digital media company specializing in technology, gaming, and lifestyle content. It operates online publications, marketing services, and e-commerce platforms, delivering information, reviews, and advertising solutions to global audiences.
8. MoonLake Immunotherapeutics (NASDAQ:MLTX)
MoonLake Immunotherapeutics (NASDAQ:MLTX) is placed eighth on our list of most promising stocks.
TheFly reported on February 26 that Goldman Sachs increased its price target on MLTX to $11 from $10 and maintained a Sell rating. The update followed the company’s fourth-quarter and full-year results, with cash expected to fund operations into the second half of 2027 under its Hercules Capital facility. Although MLTX provided pipeline updates, the firm continues to question the likelihood of regulatory approval for sonelokimab.
On February 22, MoonLake Immunotherapeutics (NASDAQ:MLTX) disclosed topline findings from the Phase 2 S-OLARIS study of SLK in individuals with radiographic and non-radiographic axial spondyloarthritis (axSpA). In the trial, 81% of treated patients (n=26, mNRI) achieved an ASAS40 response at Week 12, alongside more than 80% reaching clinically important improvement based on ASDAS-CRP.
Imaging assessments, which include SPARCC MRI of the sacroiliac joints and 18F-NaF PET scans, showed reductions in inflammation and osteoblast activity. Biomarker analyses indicated rapid and sustained suppression of inflammatory pathways, and the safety results aligned with prior studies without identifying new safety concerns. The company intends to advance SLK into further clinical development, with additional updates shared during its fourth-quarter and full-year results announcement.
MoonLake Immunotherapeutics is a clinical-stage biopharmaceutical company developing novel Nanobody therapies, including sonelokimab, to treat inflammatory diseases like hidradenitis suppurativa and psoriatic arthritis, aiming to improve patient outcomes through advanced immune-targeted medicines.
7. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)
The seventh stock among the small-cap stocks is Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH).
TheFly reported on February 27 that Wells Fargo reduced its price target on AMPH to $30 from $34 and kept an Overweight rating on the shares. Despite the recent approvals of AMP-015 and AMP-007, the firm observes that the stock is under pressure because of the reduced sales projection. According to the firm, AMP-007’s performance is anticipated to be crucial in attaining mid-to high-single-digit revenue growth in the future.
In a recent development, the FDA approved Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)’s Abbreviated New Drug Application (ANDA) for Ipratropium Bromide HFA Inhalation Aerosol, 17 mcg per actuation, on February 26. The FDA found that AMPH’s product is medically and bioequivalent to Atrovent HFA Inhalation Aerosol from Boehringer Ingelheim.
For this inhalation aerosol, AMPH is entitled to 180 days of generic exclusivity since it is the first ANDA applicant to receive a Paragraph IV certification. The first day of the product’s commercial introduction will mark the start of this exclusivity period, giving AMPH a brief window of market protection.
In addition to supporting the company’s Q4 2025 earnings report, the approval is a major regulatory milestone that puts it in a position to increase its market share in the respiratory medication industry while utilizing the advantages of exclusivity to spur early product uptake.
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is a biopharmaceutical company that develops, manufactures, and markets injectable, inhalation, and intranasal medications, including complex generics and proprietary products, for hospitals and clinical use. Its portfolio addresses critical care needs and drug delivery innovations.
6. Marqeta, Inc. (NASDAQ:MQ)
Marqeta, Inc. (NASDAQ:MQ) is placed sixth among the most promising stocks on our list.
TheFly reported on February 25 that Morgan Stanley reduced its price target for MQ to $5 from $6 while keeping an Equal Weight rating on the shares. The firm emphasized that after the Q4 report, it still views MQ as a “show-me” company and that its inconsistent financial results are a major factor in the continued investor concern.
Marqeta, Inc. (NASDAQ:MQ) released its 2025 full-year and fourth-quarter results on February 24. The corporation highlights that with net revenue of $172 million and gross profit of $120 million, representing advances of 27% and 22%, respectively, the company’s Q4 total processing volume increased 36% year over year to $109 billion. Adjusted EBITDA increased to $31 million, while GAAP net loss shrank to $1 million.
The company said that full-year processing volume increased by 31% to $383 billion, net revenue jumped by 23% to $625 million, and gross profit increased by 24% to $437 million, with a gross margin of 70%. Adjusted EBITDA came to $110 million, while the full-year GAAP net loss was $14 million. The findings show robust increases in transaction volumes, increased profitability, and greater operational efficiency, laying the groundwork for growing consumer involvement and reach in 2026.
Marqeta, Inc. (NASDAQ:MQ) is a cloud‑based financial technology company providing an open API platform for modern card issuing and payment processing. It enables businesses to launch customized physical and virtual card programs, streamline payments, and embed scalable fintech solutions.
5. Willdan Group, Inc. (NASDAQ:WLDN)
The fifth stock is Willdan Group, Inc. (NASDAQ:WLDN) on this list.
TheFly reported on February 27 that WLDN announced it was chosen by Mt. San Antonio College in California to carry out a $49 million energy services project. In addition to infrastructure upgrades like solar photovoltaic installations, a battery storage system, EV charging stations, and a renovated parking lot, the project will involve the full deployment of distributed energy resources.
The project should be completed by Q3 2027. In order to carry out DER projects at Mt. SAC and other community colleges, as well as other public sector sites around the state, Willdan Group, Inc. (NASDAQ:WLDN) has a master services agreement with the Foundation for California Community Colleges.
On February 26, WLDN also released guidance for FY26 and its financial results for the fourth quarter and fiscal year that concluded on January 2, 2026. For 2026, the business anticipates adjusted diluted EPS to be in the $4.50 to $4.70 range.
In the fourth quarter of 2025, WLDN reported contract revenue of $173.7 million, up 20.6%, net revenue of $89.5 million, up 12.9%, net income of $18.7 million, and adjusted EBITDA of $20.0 million. GAAP diluted EPS was $1.23, while adjusted diluted EPS reached $1.57. For the full year 2025, contract revenue totaled $681.6 million (up 20.5%), net revenue was $364.8 million (up 23.1%), net income was $52.6 million, GAAP diluted EPS was $3.49, and adjusted diluted EPS was $4.89.
Willdan Group, Inc. (NASDAQ:WLDN) is a U.S. consulting and technical services firm providing energy efficiency, engineering, planning, and infrastructure solutions to utilities, government agencies, and private industry, helping clients modernize systems and improve sustainability and performance.
4. The Marcus Corporation (NYSE:MCS)
Another one of the most promising stocks on our list is The Marcus Corporation (NYSE:MCS).
TheFly reported on Feb 26 that MCS reported its fourth-quarter and full-year fiscal 2025 results. The report states that while operational income was $1.7 million as opposed to a $2.2 million loss in the previous year, the company’s total revenues for the fourth quarter came to $193.5 million, up 2.8% from $188.3 million in Q4 2024.
The company revealed that a $7.6 million income tax benefit from a historic rehabilitation tax credit contributed to the increase in net earnings from $1.0 million to $6.0 million. For the quarter, adjusted EBITDA increased 3.6% to $26.8 million. Including a $7.6 million tax benefit and a $3.4 million gain from a property insurance settlement, total revenues for the entire year were $758.5 million, up 3.1%, with operating income of $17.1 million and net earnings of $12.7 million.
Marcus Theatres reported $123.8 million in Q4 revenue, up 2.2%, with operating income of $7.7 million and adjusted EBITDA of $24.1 million. Full-year theatre revenue was $462.7 million, operating income $29.4 million, and adjusted EBITDA $76.5 million. Share repurchases totaled 1.1 million shares for $18.0 million in fiscal 2025.
Furthermore, the Marcus Corporation (NYSE:MCS) Board of Directors previously declared on February 11 that stockholders registered as of February 25, 2026, will receive a normal quarterly cash dividend of $0.08 per common share on March 16, 2026. Furthermore, a dividend of $0.073 per share was declared for the non-publicly traded Class B common stock, which will likewise be distributed to shareholders of record on February 25, 2026, on March 16, 2026.
The Marcus Corporation (NYSE:MCS) is a U.S. publicly traded entertainment and hospitality company operating Marcus Theatres, one of the nation’s largest cinema chains, and Marcus Hotels & Resorts, a portfolio of hotels and resorts across multiple states.
3. Forward Air Corporation (NASDAQ:FWRD)
Forward Air Corporation (NASDAQ:FWRD) is among the most promising stocks.
TheFly reported on February 24 that Susquehanna lowered FWRD price target to $42 from $45 and maintained a Positive rating on the shares. With shares trading at about 8.5 times estimated 2026 EBITDA, the stock continues to provide great value, according to the firm, which also observed that the company’s strategic review appears to be nearing conclusion.
Forward Air Corporation (NASDAQ:FWRD) reported its fourth-quarter and full-year 2025 results on February 23. The company recorded consolidated revenue of $631 million for Q4, which is slightly below last year’s $633 million, while Consolidated EBITDA rose to $77 million from $72 million a year ago. For the full year, the company said its consolidated EBITDA totaled $307 million, which is near 2024’s $311 million.
Additionally, the company noted that its Q4 performance differed by segment: Expedited Freight saw an increase in EBITDA to $25 million with a 10.1% margin, Omni achieved record revenue and EBITDA with a 10% margin, and Intermodal, under pressure from trade softness, reported $7 million in EBITDA with a 14.2% margin. All things considered, cash from operations increased to $44 million in 2025 from a $69 million outflow in 2024, and liquidity was $367 million, which included $261 million available under the credit facility and $106 million in cash.
Forward Air Corporation (NASDAQ:FWRD) is a leading North American freight and logistics provider offering expedited less‑than‑truckload (LTL), pickup and delivery, truckload brokerage, intermodal drayage, warehousing, and customs brokerage services through a national terminal network.
2. Fortrea Holdings Inc. (NASDAQ:FTRE)
Fortrea Holdings Inc. (NASDAQ:FTRE) is one of the most promising stocks.
TheFly reported on February 27 that Baird reduced its price target for FTRE to $16 from $19 while continuing to assign an Outperform rating to the stock.
In its financial projection for 2026, which was released on February 26, Fortrea Holdings Inc. (NASDAQ:FTRE) predicted total revenues of $2,550 million to $2,650 million. Additionally, the business expects adjusted EBITDA to be between $190 million and $220 million. The underlying premise of this guideline is that foreign exchange rates as of December 31, 2025, will not change over the course of the projection period.
The company’s fourth-quarter and full-year 2025 results, which showed $660.5 million in sales for Q4 and $2,723.4 million for the entire year, were followed by FTRE’s projection. The company stated that a $797.9 million non-cash goodwill impairment was a major factor in the full-year GAAP net loss of $(986.2) million, while adjusted net income, which did not include such charges, came to $40.4 million. The year’s adjusted EBITDA was $189.9 million. At the end of 2025, the firm had $174.6 million in cash and cash equivalents, $1,066.3 million in gross debt, a $7,728.0 million backlog, and a trailing twelve-month book-to-bill ratio of 1.02x.
FTRE expects total revenues for the full year 2026 to fall between $2,550 million and $2,650 million, with adjusted EBITDA projected in the range of $190 million to $220 million. This outlook is based on the assumption that foreign currency exchange rates as of December 31, 2025, remain consistent throughout the year.
Fortrea Holdings Inc. (NASDAQ:FTRE) is a global contract research organization providing clinical development, trial management, pharmacology, and consulting services to pharmaceutical, biotech, and medical device companies, helping advance therapies from early research through post‑approval.
1. Armata Pharmaceuticals, Inc. (NYSE:ARMP)
Armata Pharmaceuticals, Inc. (NYSE:ARMP) is among the most promising stocks.
On February 23, 2026, H.C. Wainwright increased the price target for ARMP from $9.00 to $15.00 and kept a Buy rating on the shares. The modification comes after the FDA designated AP-SA02 as a Qualified Infectious Disease Product, providing extra regulatory support as the business gets ready for its Phase 3 superiority research, which is set for the second half of 2026.
Armata Pharmaceuticals, Inc. (NYSE:ARMP) declared on February 23 that its intravenous Staphylococcus aureus multi-phage candidate, AP-SA02, has been given Qualified Infectious Disease Product (QIDP) classification by the U.S. FDA. Its usage as an adjuvant treatment for complex bacteremia brought on by both methicillin-sensitive (MSSA) and methicillin-resistant (MRSA) S. aureus is covered by the designation. In the second half of 2026, the company plans to place AP-SA02 into a Phase 3 superiority trial for complex bloodstream infections caused by S. aureus.
Armata Pharmaceuticals, Inc. (NYSE:ARMP) is a clinical-stage biotech company developing precision bacteriophage-based therapies to treat antibiotic-resistant and hard-to-treat bacterial infections, advancing a pipeline of pathogen-specific phage candidates from discovery through clinical trials.
While we acknowledge the potential of ARMP 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 ARMP and that has 100x upside potential, check out our report about this cheapest AI stock.
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