In this article, we will be taking a look at the 9 High Growth Small Cap Stocks That Are Profitable.
As strategists weigh solid earnings momentum against expensive valuations and longer-term dangers, market opinions are still divided. Even while stocks have consistently performed better than anticipated, investors are becoming more concerned about whether gains are sustainable and whether risk is being fairly priced.
The head of equities and portfolio strategy at CIBC, Chris Harvey, told CNBC that the S&P 500 may eventually hit 7,450, but he anticipates a decline first. Harvey claims that even though the fundamentals are still the same, risk assets are currently too costly and require a repricing. He believes investors would embrace greater diversification and better risk-reward possibilities, concentrating on areas where fundamentals might improve, rather than concentrating on specific businesses.
UBS supports the bullish results estimate, pointing out that corporate profits have exceeded expectations, with the technology sector leading the way. Even in the face of macroeconomic uncertainty, forward profit predictions hold up well. According to UBS, ahead P/E multiples are just marginally higher than they were at the beginning of the year, indicating that recent market gains have been driven by earnings growth rather than excess valuation. UBS anticipates that profit growth will continue to be a major factor driving equities, and bottom-up earnings projections are still rising.
Still, caution persists. Strategists at Bank of America predict that the S&P 500 will return -0.1% over the next ten years due to high valuations and a string of solid gains. Based on current and future P/E levels, Torsten Sløk, chief economist at Apollo, also anticipates that the market will stay relatively flat.
On the other hand, despite a waning Santa Claus surge, David Wagner of Aptus Capital Advisors is still upbeat and sees pullbacks as healthy and typical.
Our Methodology
Our methodology involved first filtering stocks with a market capitalization between $300 million and $2 billion, a five-year revenue growth of at least 20%, and profit margins of at least 15%. From this filtered list, we selected the top 9 stocks and ranked them in ascending order based on their revenue growth.
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 9 high growth small cap stocks that are profitable.
9. Old Second Bancorp, Inc. (NASDAQ:OSBC)
Revenue Growth (5y): 21.26%
Net Profit Margin: 24.11%
Market Capitalization: $1.04 billion
Old Second Bancorp, Inc. (NASDAQ:OSBC) is placed ninth on our list of high-growth stocks.
TheFly reported on January 23 that DA Davidson raised its price target for OSBC to $23 from $22 and maintained a Neutral rating following the company’s fourth-quarter earnings. The firm noted that the impact of the Evergreen acquisition was clearly reflected in Q4 results, with a very strong net interest margin alongside higher-than-normal net charge-offs. DA Davidson added that while growth is expected to improve in 2026 with solid cost control, the elevated level of non-performing assets compared with peers remains a key risk to monitor.
Old Second Bancorp, Inc. (NASDAQ:OSBC) reported a strong fourth quarter marked by solid growth in net interest and dividend income, which rose to $83.1 million. Profitability remained among the strongest in the industry, supported by a resilient tax-equivalent net interest margin of 5.09% and an adjusted efficiency ratio of 51.28%. Management highlighted that the company’s strong earnings performance and balanced growth helped improve capital strength, with tangible common equity and tangible book value both increasing despite acquisition-related dilution.
Old Second Bancorp, Inc. (NASDAQ:OSBC) is a regional bank holding company headquartered in Aurora, Illinois, providing community banking services through Old Second National Bank. It offers retail and commercial banking, loans, deposit accounts, trust and wealth management, and other financial services.
8. SkyWater Technology, Inc. (NASDAQ:SKYT)
Revenue Growth (5y): 21.42%
Net Profit Margin: 36.35%
Market Capitalization: $1.63 billion
The eighth stock on our list of high growth stocks is SkyWater Technology, Inc. (NASDAQ:SKYT).
TheFly reported on January 27 that TD Cowen downgraded SKYT from Buy to Hold while increasing its price target to $35 from $24. The change followed the company’s agreement to be acquired by IonQ in a deal valuing SKYT at $35 per share, or approximately $1.88 billion.
Similarly, on the same day, Craig-Hallum also downgraded SkyWater Technology, Inc. (NASDAQ:SKYT) from Buy to Hold and set a $35 price target following the announcement of its acquisition by IonQ. The firm indicated that the transaction is likely to be completed and said that potential concerns from other quantum customers are unlikely to derail the deal. Craig-Hallum also pointed out that SKYT’s shares are trading within roughly 10% of the agreed transaction price.
SkyWater Technology, Inc. (NASDAQ:SKYT) is a U.S.-based pure-play semiconductor foundry providing design, development, and manufacturing services for chips across aerospace, defense, automotive, and industrial markets. The company supports secure domestic production with advanced fabrication capabilities and strategic partnerships to strengthen the U.S. semiconductor supply chain.
7. Safehold Inc. (NYSE:SAFE)
Revenue Growth (5y): 21.95%
Net Profit Margin: 29.67%
Market Capitalization: $1.00 billion
Safehold Inc. (NYSE:SAFE) is one of the best high growth stocks on our list.
TheFly reported on January 22 that Morgan Stanley downgraded SAFE from Equal Weight to Underweight and reduced its price target to $14 from $16. The firm saw two major pressures: a high dividend payout ratio and slow origination activity. The more cautious approach was also influenced by continuing litigation with a tenant, obstacles pertaining to Star Holdings fee income, and limited visibility into unlocking value from Caret.
Separately, earlier this month, on January 12, Mizuho raised its price target for Safehold Inc. (NYSE:SAFE) to $15 from $14 while maintaining a Neutral rating. The adjustment came as part of the firm’s 2026 outlook for the REIT sector. Mizuho noted a mixed macroeconomic environment, with valuations appearing expensive relative to fixed-income alternatives, and cautioned that a slowing economy could pose risks in fiscal 2026 despite improving supply-and-demand fundamentals.
Safehold Inc. (NYSE:SAFE). is a U.S. real estate investment trust (REIT) that pioneered modern ground leases, providing long-term, cost-efficient capital to unlock land value for commercial property owners. The company helps owners and developers enhance returns with less risk across multifamily, office, industrial, hospitality, and mixed-use properties.
6. Esquire Financial Holdings, Inc. (NASDAQ:ESQ)
Revenue Growth (5y): 24.46%
Net Profit Margin: 34.67%
Market Capitalization: $886.32 million
The sixth stock on our list of high growth stocks is Esquire Financial Holdings, Inc. (NASDAQ:ESQ).
TheFly reported on January 23 that Keefe, Bruyette & Woods raised its price target for ESQ to $85 from $80 while maintaining a Market Perform rating. The firm noted that the company’s core net interest income came in broadly in line with expectations.
The company reported on January 22 that it showed net interest income of $33.3 million, slightly above the $31.94 million consensus. The company posted a net interest margin of 6.05%, up marginally from 6.04% in the prior quarter, and book value per share increased to $33.86 from $32.60. Esquire Financial Holdings, Inc. (NASDAQ:ESQ)’s common equity tier 1 capital ratio was 14.18%, down from 15.27% the previous quarter. Leadership emphasized their continued focus on serving the complex litigation and payments markets with tech-enabled financial solutions, investing in client experience, and maintaining strong growth and performance metrics.
Esquire Financial Holdings, Inc. (NASDAQ:ESQ) is a financial holding company and parent of Esquire Bank, a digital‑first commercial bank serving the legal industry, small businesses, and retail clients nationwide. It offers tailored banking, lending, and payment processing solutions while leveraging technology and innovation.
5. Afya Limited (NASDAQ:AFYA)
Revenue Growth (5y): 27.54%
Net Profit Margin: 20.07%
Market Capitalization: $1.35 billion
The next stock on our list of high growth stocks is Afya Limited (NASDAQ:AFYA).
TheFly reported on January 16 that UBS downgraded AFYA from Buy to Neutral and lowered its price target to $16 from $18. The firm noted that higher investments amid naturally increased volatility during a political year could introduce uncertainties in AFYA’s investment outlook. Additionally, margin pressures may weigh on the shares in the near term, partially offsetting the potential for re-rating.
Additionally, earlier this month, on January 7, JPMorgan lowered its rating on Afya Limited (NASDAQ: AFYA) to Neutral from Overweight and reduced the price target to $22 from $24.50. The firm said Afya is less positioned to benefit from Brazil’s easing cycle compared with peers, following updated estimates and revised sector preferences for 2026.
Afya Limited (NASDAQ:AFYA) is a Brazilian medical education and healthcare technology group offering undergraduate medical programs, continuing education, and digital health services. It delivers an integrated physician‑centric ecosystem that supports students and healthcare professionals with education, training, clinical tools, and digital platforms across the medical career lifecycle.
4. Avino Silver & Gold Mines Ltd. (NYSE:ASM)
Revenue Growth (5y): 28.01%
Net Profit Margin: 24.71%
Market Capitalization: $1.63 billion
Avino Silver & Gold Mines Ltd. (NYSE:ASM) stands fourth on our list of high growth stocks.
TheFly reported on January 23 that H.C. Wainwright raised its price target for ASM to $12.50 from $7.40 and maintained a Buy rating. The increase followed the company’s announcement of its 2025 production results, with the higher target supported by updated price assumptions and a one-year forward adjustment to the valuation.
Additionally, recently, on January 26, Avino Silver & Gold Mines Ltd. (NYSE:ASM) reported the results of six drill holes at its La Preciosa project, completing the company’s 2025 drilling program. Five of the holes were part of an infill program, while one was twinned with earlier drilling. The results supported the current vein-based resource model by confirming high-grade silver and gold, with several intercepts exceeding estimates. The findings also led management to reevaluate La Gloria’s underground mining techniques, which would enable greater tonnage per blast and cheaper costs while boosting confidence in the project’s resource geometry.
Avino Silver & Gold Mines Ltd. (NYSE:ASM) is a Canadian mining company focused on the acquisition, exploration, and production of silver, gold, copper, and base metal deposits. It operates the Avino Mine in Mexico and is advancing additional projects like La Preciosa to grow production and deliver long‑term value.
3. Innovative Aerosystems, Inc. (NASDAQ:ISSC)
Revenue Growth (5y): 31.31%
Net Profit Margin: 18.53%
Market Capitalization: $377.77 million
The third stock on our list is Innovative Aerosystems, Inc. (NASDAQ:ISSC).
TheFly reported on January 14 that Northland raised its price target on ISSC to $24 from $17.50 while maintaining an Outperform rating. The firm noted that the company’s focus on retrofitting projects is picking up momentum. It expects revenue to grow 7.5% in fiscal 2027, up from 4.1% in 2026, and predicts that EBTIDA margins will improve to 29% from 26.5%.
Separately, Innovative Aerosystems (ISSC) posted strong Q4 and FY2025 results on December 18, 2025, with Q4 revenue up 45% year over year to $22 million. Gross margins rose to 63.2%, and adjusted EBITDA jumped 71% to $9.6 million. Management reaffirmed its “IA Next” growth plan, targeting $250 million in revenue and 25–30% EBITDA margins. A $77 million backlog and the AI-enabled Liberty Flight Deck underpin a positive outlook.
Moreover, the company announced earlier today that it will release it’s first quarter 2026 results on February 12.
Innovative Aerosystems, Inc. (NASDAQ:ISSC) is a U.S. aerospace company that engineers and manufactures advanced avionics and flight systems for commercial, business, and military aircraft. It offers cockpit displays, autothrottles, navigation and air data systems, and other integrated solutions designed to modernize and enhance aircraft performance and safety.
2. Novavax, Inc. (NASDAQ:NVAX)
Revenue Growth (5y): 39.06%
Net Profit Margin: 32.09%
Market Capitalization: $1.60 billion
Novavax, Inc. (NASDAQ:NVAX) stands second on our list of high growth stocks.
TheFly reported on January 20 that BofA raised its price target on NVAX to $7 from $6 while maintaining an Underperform rating.
The update followed the company’s announcement of a non-exclusive licensing deal with Pfizer for its Matrix-M adjuvant across up to two infectious disease areas. While BofA views the agreement and upfront payment as positive signs of interest in Novavax, Inc. (NASDAQ:NVAX)’s technology, the firm remains cautious about the timing of development for assets under the license and continues to rate the stock Underperform.
Additionally, on January 21, NVAX saw unusually strong bullish options activity, with call trading running at roughly three times normal levels. Implied volatility jumped by nearly eight points to above 71%, while the put/call ratio fell to 0.07, reflecting strong upside positioning ahead of the company’s expected earnings later in February.
Novavax, Inc. (NASDAQ:NVAX) is a U.S. biotechnology company developing and commercializing innovative vaccines against serious infectious diseases using its recombinant protein platform and Matrix‑M adjuvant. Its portfolio includes COVID‑19 vaccines and pipeline candidates for influenza and combo vaccines, supported by strategic partnerships to expand global health impact
1. CorMedix Inc. (NASDAQ:CRMD)
Revenue Growth (5y): 300.38%
Net Profit Margin: 75.82%
Market Capitalization: $610.62 million
CorMedix Inc. (NASDAQ:CRMD) tops our list for being one of the high growth stocks.
TheFly reported on January 23 that H.C. Wainwright lowered the price target on CRMD to $13 from $18 while keeping a Buy rating. The adjustment reflects updated guidance for 2026–2027 related to DefenCath. The firm noted that CRMD has now entered a phase where clinical results will play a larger role than commercial performance in shaping the company’s future.
Similarly, on January 21, RBC Capital lowered the price target on CorMedix Inc. (NASDAQ:CRMD) to $13 from $22 while maintaining an Outperform rating. The firm updated its models for several biotech companies following discussions with management.
CorMedix Inc. (NASDAQ:CRMD) is a biopharmaceutical company developing and commercializing therapeutic products to prevent and treat serious diseases. Its lead product, DefenCath, is an FDA‑approved catheter lock solution that reduces bloodstream infections in hemodialysis patients.
While we acknowledge the potential of CRMD 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 CRMD and that has 100x upside potential, check out our report about this cheapest AI stock.
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