In this article, we will take a look at the 12 Small Cap Stocks with High Upside Potential.
The trade war saga between the U.S. and China appears to be nearing a conclusion, as China’s Ministry of Commerce shared details on the trade deal on June 27. Both countries have confirmed details of a trade framework that will facilitate the export of rare earths and ease restrictions on technology. China will review and approve export applications for items subject to export rules, whereas the U.S. will cancel different restrictive measures taken against Beijing.
On June 26, a White House official clarified the U.S.’s agreement with China and said both countries have agreed to “an additional understanding of a framework to implement the Geneva agreement.”
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This development signals a better second half of the year. According to Deloitte’s latest economic outlook, the U.S. real consumer spending is expected to rise 1.4% in 2025 before growing at 1.5% in 2026. Spending on services is expected to soar by 1.5% in 2025 and in 2026, as services will be less impacted by tariffs and interest rates.
In the last month, the iShares Russell 2000 ETF has soared over 4.95%, as of June 30, indicating notable recovery.
With these trends in view, let’s take a look at the 12 small-cap stocks with high upside potential.
A closeup of investor hands holding a small-cap investment security.
Our Methodology
To compile our list of the 12 Small-Cap Stocks with High Upside Potential, we used the Finviz screener. Based on our methodology, we shortlisted the stocks with a market capitalization equal to or less than $1 billion and an analyst upside of more than 10%. Finally, we ranked the stocks based on the number of hedge funds holding stakes in these stocks, and the hedge fund data is taken from the Insider Monkey Q1 2025 database. Please note that the data was recorded on June 27, 2025.
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).
12 Small-Cap Stocks with High Upside Potential
12. Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC)
Market Capitalization: $900.11 Million
Analyst Upside: 50.43%
No. of Hedge Fund Investors: 14
Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) is one of the 12 Small Cap Stocks with High Upside Potential. On June 17, Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) announced the opening of its new store in Ruidoso, New Mexico, this fall. The new location in Ruidoso will be the company’s seventh location in the “Land of Enchantment”. The store will be located within the 70 West Plaza Shopping Center,
In addition to the Natural Grocers’ new planned store launch, the company recently expanded its house brand Cheese line with five new organic varieties. Consumers can enjoy these new premium quality products at an Always Affordable Price, reflecting the value of Natural Grocers’ brand.
Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) is a speciality retailer of natural and organic groceries, body care products, and dietary supplements. Its stores provide a wide range of organic products in a smaller-store format with a clean and easy shopping atmosphere for its customers.
11. Enerflex Ltd. (NYSE:EFXT)
Market Capitalization: $970.46 Million
Analyst Upside: 40.30%
No. of Hedge Fund Investors: 15
Enerflex Ltd. (NYSE:EFXT) is one of the 12 Small Cap Stocks with High Upside Potential. On June 26, RBC Capital kept its Buy rating on EFXT, maintaining the price target at $12.
Keith Mackey RBC Capital reiterated its rating on Enerflex Ltd. stock following the company’s strong Q1 2025 results. The company posted adjusted earnings of around $0.23, surpassing consensus by $0.02. The analyst remains optimistic about Enerflex’s progress as the company’s energy infrastructure and aftermarket services contributed almost 70% of the gross margin. Enerflex made notable development during Q1 with the addition of nearly 20,000 horsepower to its U.S. contract compression fleet. The company plans to cross 475,000 horsepower by the end of 2025. Mackey sees strong growth going forward as Enerflex’s international energy infrastructure business is backed by $1.3 billion of contracted revenue with an average contract term of five years.
Enerflex Ltd. (NYSE:EFXT) is an energy infrastructure and energy transition company offering solutions in North America, Latin America, and the Eastern Hemisphere. The company’s portfolio consists of compression, processing, cryogenic, and treated water solutions.
10. Akebia Therapeutics, Inc. (NASDAQ:AKBA)
Market Capitalization: $958.62 Million
Analyst Upside: 91.78%
No. of Hedge Fund Investors: 19
Akebia Therapeutics, Inc. (NASDAQ:AKBA) is one of the 12 Small Cap Stocks with High Upside Potential. On June 4, the company published pre-specified analyses for its vadadustat global phase 3 clinical program. The program consisted of two trials for patients with dialysis-dependent chronic kidney disease and two trials for patients with non-dialysis-dependent chronic kidney disease.
The pre-specified analyses revealed that patients with DD-CKD reported similar efficacy and safety levels for vadadustat and darbepoetin alfa in both the United States and outside the United States.
Vafseo referred to as vadadustat, was originally approved by the US Food and Drug Administration last year in March to treat anaemia due to chronic kidney disease. The drug has been available in the United States since January 2025.
Akebia Therapeutics, Inc. (NASDAQ:AKBA) is a biopharmaceutical company focused on improving the lives of people with kidney disease. The company has two drugs approved by the FDA.
9. Bristow Group Inc. (NYSE:VTOL)
Market Capitalization: $959.65 Million
Analyst Upside: 40.93%
No. of Hedge Fund Investors: 20
Bristow Group Inc. (NYSE:VTOL) is one of the 12 Small Cap Stocks with High Upside Potential. On May 20, Bristow Group Inc. (NYSE:VTOL) released its latest global sustainability report, reaffirming its commitment to responsible growth.
The company strengthened its fleet with modernization efforts through an agreement to acquire 10 Leonardo AW189 super-medium helicopters, with an option to purchase 10 more. This agreement is to support CO2 reduction and sustainable aviation fuel usage. Bristow has also signed a letter of intent to participate in an international test arena for zero- and low-emission aviation in Norway.
“Our mission continues to prioritize safety, sustainability, and positive community impact. The achievements highlighted in this report reflect our dedicated efforts to prioritize sustainable business practices, uphold safety as our highest priority, and strengthen our connections with communities where we operate and call home,” said Bristow President and CEO Chris Bradshaw.
In addition to the company’s sustainable economic developments, on June 12, Bristow entered a strategic partnership with Vertical Aerospace, another global aerospace and technology company. The two entities plan to develop a scalable eVTOL operations platform. The platform will be a catalyst in bringing advanced air mobility (AAM) to commercial operations.
Bristow Group Inc. (NYSE:VTOL) is a provider of sustainable and innovative vertical flight solutions. It provides its aviation services to offshore energy companies and the government.
8. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN)
Market Capitalization: $986.67 Million
Analyst Upside: 59%
No. of Hedge Fund Investors: 20
Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is one of the 12 Small Cap Stocks with High Upside Potential. On June 11, Grid Dynamics released an intralogistics optimization starter kit for the NVIDIA Omniverse. The solution promises improved warehouse efficiency and a reduction in labor costs.
Intralogistics operators can now create digital twins of warehouses, distribution centers, and production facilities. The digital twins facilitate potential layouts and what-if analyses. The kit ensures that the digital twins integrate historical order patterns, the facility’s physical layout, and inventory management structures.
Customers of Grid Dynamics believe that building digital twins brings a lot of value to their systems. To meet growing demand, the company is expanding its portfolio of supply chain and smart manufacturing solutions.
Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is a technology consulting and advanced analytics service. Its services include a cloud platform and product engineering services to the retail, technology, media, telecom, and finance sectors.
7. Eos Energy Enterprises, Inc. (NASDAQ:EOSE)
Market Capitalization: $1 Billion
Analyst Upside: 36.05%
No. of Hedge Fund Investors: 21
Eos Energy Enterprises, Inc. (NASDAQ:EOSE) is one of the 12 Small Cap Stocks with High Upside Potential. On June 16, Eos Energy Enterprises, Inc. (NASDAQ:EOSE) closed $336 million in concurrent offerings of common stock and senior convertible notes.
This move is more than a capital raise as it offers financial flexibility to Eos Energy required to scale operations, aiming for long-term energy storage global demand. It allows the company to restructure key portions of its debt, materially reducing its cost of capital while improving its balance sheet. This transaction will result in almost $400 million in savings over the terms of Eos Energy’s debt.
“This was more than a capital raise – it strategically positions the Company to achieve our long-term objectives. Improving our capital structure provides the tools required to operationally position the Company for growth. A stronger balance sheet combined with an improved capital cost structure allows Eos to deliver for its customers and build long-term shareholder value,” said Joe Mastrangelo, Chief Executive Officer of Eos.
On June 9, Stifel’s analyst slightly reduced the price target on EOSE from $9 to $8.5, keeping its Buy rating on the stock. The analyst remains optimistic and highlights the company’s improvement of its balance sheet as a positive sign.
Eos Energy Enterprises, Inc. (NASDAQ:EOSE) designs, develops, and manufactures zinc-based energy storage solutions for utility-scale, microgrid, and commercial applications.
6. Collegium Pharmaceutical, Inc. (NASDAQ:COLL)
Market Capitalization: $962.02 Million
Analyst Upside: 40.33%
No. of Hedge Fund Investors: 21
Collegium Pharmaceutical, Inc. (NASDAQ:COLL) is one of the 12 Small Cap Stocks with High Upside Potential. On May 12, the diversified biopharmaceutical company entered an accelerated share purchase agreement with Jefferies LLC.
Under the agreement, the company agreed to repurchase $25 million of the company’s common stock. The accelerated share repurchase program is part of an elaborate $150 million share repurchase program approved by the Board last year in January. Colleen Tupper, Chief Financial Officer, stated:
“Collegium is off to a strong start in 2025 with first quarter revenues growing 23% year-over-year, driven by robust sales from our pain portfolio and a significant contribution from our rapidly growing ADHD medicine, Jornay PM. The Board’s authorization of a $25 million ASR program reflects our strategic approach to capital allocation that balances driving sustained revenue growth while also returning capital to shareholders. We are confident in our future growth trajectory and remain committed to generating additional value as we invest in our key product growth drivers, expand our portfolio through disciplined business development, rapidly pay down debt, and opportunistically repurchase shares.”
In Q1 FY2025, the company reported net revenue worth $177.8 million, up by 23% year-over-year. Its pain portfolio generated $149.2 million, with its three primary products reporting record revenue growth. The company also celebrates a stable financial condition with cash and cash equivalents, and marketable securities worth $197.8 million.
Collegium Pharmaceutical, Inc. (NASDAQ:COLL) is a pharmaceutical company that develops medicines for pain management. The company currently has six approved drugs in its portfolio.
5. Accel Entertainment, Inc. (NYSE:ACEL)
Market Capitalization: $1 Billion
Analyst Upside: 34.45%
No. of Hedge Fund Investors: 24
Accel Entertainment, Inc. (NYSE:ACEL) is one of the 12 Small Cap Stocks with High Upside Potential. Accel Entertainment, Inc. (NYSE:ACEL) made amendments to its bylaws following the Annual Meeting of Stockholders held on June 6.
During the Annual Meeting, stockholders approved the second amendment and restatement of Accel Entertainment’s Amended and Restated Long Term Incentive Plan. This development increases the share reserve by 2 million shares of Accel’s Class A-1 common stock, bringing the total share authorization to 10 million. The stockholders approved the Exculpation Amendment, which aims to exculpate certain officers from personal liability for breaches of duty care in specific circumstances. This amendment reflects the company’s commitment to enhancing corporate governance practices and aligning its incentive structures with the long-term interests of its stakeholders.
Accel Entertainment, Inc. (NYSE:ACEL) is a distributed gaming operator in the U.S. and a partner for local business owners. Accel offers turnkey full-service gaming solutions to authorized non-casino locations such as bars, restaurants, convenience stores, and fraternal and veteran locations across the U.S.
4. The Pennant Group, Inc. (NASDAQ:PNTG)
Market Capitalization: $1 Billion
Analyst Upside: 10.74%
No. of Hedge Fund Investors: 30
The Pennant Group, Inc. (NASDAQ:PNTG) is one of the 12 Small Cap Stocks with High Upside Potential. On June 3, Wells Fargo increased the price target on The Pennant Group stock from $30 to $31, keeping its Equal Weight rating on the shares.
Stephen Baxter from Wells Fargo raised the price target on PNTG, citing the company’s strong Q1 2025 growth across its key segments. The company’s Home Health and Hospice segment outperformed with a record-setting quarter, with a 37.2% rise in revenue and a 40.6% growth in adjusted EBITDA. Baxter expects the company to perform well, aligning with high-end 2025 guidance and a positive update on the Signature integrating process. The company has integrated 36 new operations since January 2024, with many acquisitions performing above initial expectations.
The Pennant Group, Inc. (NASDAQ:PNTG) offers healthcare services in the U.S. and operates through two segments, including Home Health and Hospice Services, and Senior Living Services.
3. Arcus Biosciences, Inc. (NYSE:RCUS)
Market Capitalization: $841.78 Million
Analyst Upside: 201.89%
No. of Hedge Fund Investors: 35
Arcus Biosciences, Inc. (NYSE:RCUS) is one of the 12 Small Cap Stocks with High Upside Potential. On June 1, Arcus Biosciences presented the first data for casdatifan plus cabozantinib in oral metastatic kidney cancer, which showed a confirmed response.
The trials by Dr. Toni K. Choueiri showed a confirmed overall response rate of 46% in patients who completed a minimum of 12 weeks of follow-up. The trials conducted through casdaifan also included a HIF-2a inhibitor, cabozantinib, a tyrosine kinase inhibitor. The combination had a manageable safety profile with no meaningful overlapping toxicity for the two drugs.
“These data serve as the proof of concept for PEAK-1, which will be initiated in the coming weeks and is designed to generate evidence to change the standard of care for people who have progressed on prior immunotherapy treatment,” said Terry Rosen, Ph.D., chief executive officer of Arcus.
Arcus Biosciences, Inc. (NYSE:RCUS) is working on a broad development program with the immuno-oncology (IO)-naive and post-IO settings with differentiated combinations. This program focuses on maximising the opportunity for casdatifan in clear cell renal cell carcinoma (ccRCC) patients.
Arcus Biosciences, Inc. (NYSE:RCUS) is a clinical-stage biopharmaceutical company developing differentiated molecules and combination therapies for people with cancer.
2. Apogee Enterprises, Inc. (NASDAQ:APOG)
Market Capitalization: $905.85 Million
Analyst Upside: 28.60%
No. of Hedge Fund Investors: 36
Apogee Enterprises, Inc. (NASDAQ:APOG) is one of the 12 Small Cap Stocks with High Upside Potential. On June 26, Apogee Enterprises Board of Directors declared a quarterly cash dividend of $0.26 per share.
The dividend announced by the Board will be payable on July 31, 2025, to shareholders of record at the close of business on July 16, 2025. The company posted strong Q1 FY2026 results, reported on June 27. Apogee’s earnings surpassed the consensus of $0.45, posting adjusted earnings of $0.56 per share.
In Q1 FY2026, the company posted 4.6% in net sales to $346.6 million, driven by $22 million from the UW Solutions acquisition. The company’s sales were also driven by growth in the Glass and Services segments. The company now expects net sales between $1.40 billion and $1.44 billion and adjusted diluted earnings between $3.80 and $4.20 per share.
Apogee Enterprises, Inc. (NASDAQ:APOG) offers architectural products and services for enclosing buildings and high-performance glass and acrylic products.
1. Mineralys Therapeutics, Inc. (NASDAQ:MLYS)
Market Capitalization: $893.55 Million
Analyst Upside: 206.35%
No. of Hedge Fund Investors: 36
Mineralys Therapeutics, Inc. (NASDAQ:MLYS) is one of the 12 Small Cap Stocks with High Upside Potential. On June 17, Mineralys Therapeutics, Inc. (NASDAQ:MLYS) reported positive topline data from its Phase 2 Explore-CKD trial of lorundrostat.
The company achieved positive topline data for the ongoing trials of lorundrostat for the treatment of subjects with hypertension and comorbid CKD. The crossover trial met the primary endpoint and showed clinically meaningful reductions in both systolic automated office blood pressure (AOBP) and urine albumin-to-creatinine ratio (UACR). The 25 mg dosage of lorundrostat achieved a 9.3 mmHg reduction in AOBP and a 7.5 mmHg placebo-adjusted reduction at four weeks. Whereas, lorundrostat showed a reduction in pre-defined endpoint spot urine UACR of 31%.
“Explore-CKD established that lorundrostat 25 mg once daily has a favorable clinical profile for this patient population. Along with the successful pivotal trials, Launch-HTN and Advance-HTN, and the ongoing open-label extension trial, these results comprise the core package for our planned NDA submission,” stated Jon Congleton, Chief Executive Officer of Mineralys.
The company continues to enroll subjects with OSA and uncontrolled hypertension for its ongoing Explore-OSA trials.
Mineralys Therapeutics, Inc. (NASDAQ:MLYS) is a clinical-stage biopharmaceutical company that develops medicines to target diseases driven by dysregulated aldosterone in the U.S.
While we acknowledge the potential of MLYS 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 MLYS and that has 100x upside potential, check out our report about this cheapest AI stock.
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